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Evaluation of Unidirectional Lateral Transshipments and Substitutions in Inventory Systems

Axsäter, Sven LU (2003) In European Journal of Operational Research 149(2). p.438-447
Abstract
One interpretation of the model considered in this paper is a single-echelon inventory system consisting of a number of local warehouses, which normally replenish from an outside supplier. In case of a stockout at a warehouse an emergency lateral transshipment from another warehouse may be possible. However, such transshipments are only allowed in one direction, i.e., the flow structure is unidirectional. Such policies can be of interest if the warehouses have very different shortage costs. Another interpretation is substitution in an inventory system. We then instead consider different items in a single warehouse. When a demand for a low quality item cannot be met directly, the item can be replaced by another high quality item. We provide... (More)
One interpretation of the model considered in this paper is a single-echelon inventory system consisting of a number of local warehouses, which normally replenish from an outside supplier. In case of a stockout at a warehouse an emergency lateral transshipment from another warehouse may be possible. However, such transshipments are only allowed in one direction, i.e., the flow structure is unidirectional. Such policies can be of interest if the warehouses have very different shortage costs. Another interpretation is substitution in an inventory system. We then instead consider different items in a single warehouse. When a demand for a low quality item cannot be met directly, the item can be replaced by another high quality item. We provide a simple and efficient approximate technique for policy evaluation in such systems. The performance of this technique is evaluated in a simulation study. Although the errors are not always negligible, the suggested method gives a good picture of how the considered lateral transshipments or substitutions affect the inventory system. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Emergency transshipments, Stochastic demand, Inventory, Substitution
in
European Journal of Operational Research
volume
149
issue
2
pages
438 - 447
publisher
Elsevier
external identifiers
  • wos:000183306500015
  • scopus:0038522557
ISSN
0377-2217
DOI
10.1016/S0377-2217(02)00447-2
language
English
LU publication?
yes
id
9c823283-82ab-4589-94ac-949117de727d (old id 636934)
date added to LUP
2008-02-04 12:24:51
date last changed
2017-09-10 03:49:10
@article{9c823283-82ab-4589-94ac-949117de727d,
  abstract     = {One interpretation of the model considered in this paper is a single-echelon inventory system consisting of a number of local warehouses, which normally replenish from an outside supplier. In case of a stockout at a warehouse an emergency lateral transshipment from another warehouse may be possible. However, such transshipments are only allowed in one direction, i.e., the flow structure is unidirectional. Such policies can be of interest if the warehouses have very different shortage costs. Another interpretation is substitution in an inventory system. We then instead consider different items in a single warehouse. When a demand for a low quality item cannot be met directly, the item can be replaced by another high quality item. We provide a simple and efficient approximate technique for policy evaluation in such systems. The performance of this technique is evaluated in a simulation study. Although the errors are not always negligible, the suggested method gives a good picture of how the considered lateral transshipments or substitutions affect the inventory system.},
  author       = {Axsäter, Sven},
  issn         = {0377-2217},
  keyword      = {Emergency transshipments,Stochastic demand,Inventory,Substitution},
  language     = {eng},
  number       = {2},
  pages        = {438--447},
  publisher    = {Elsevier},
  series       = {European Journal of Operational Research},
  title        = {Evaluation of Unidirectional Lateral Transshipments and Substitutions in Inventory Systems},
  url          = {http://dx.doi.org/10.1016/S0377-2217(02)00447-2},
  volume       = {149},
  year         = {2003},
}