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A distribution inventory model with transshipments from a support warehouse

Axsäter, Sven LU ; Howard, Christian LU and Marklund, Johan LU (2013) In IIE Transactions 45(3). p.309-322
Abstract (Swedish)
Abstract in Undetermined

This article considers a distribution inventory system consisting of N retailers and a regional support warehouse, all being replenished from a central warehouse/outside supplier. For the case where stock-outs occur, the retailers receive transshipments from the support warehouse at an extra cost. A model is presented for cost evaluation and optimization of the reorder points in the system under fill rate constraints. The solution method is designed to handle large real-life systems and is fast enough to be directly implemented in practice. A numerical study illustrates that (i) the model renders near-optimal solutions; (ii) the value of using a support warehouse can be significant even for large... (More)
Abstract in Undetermined

This article considers a distribution inventory system consisting of N retailers and a regional support warehouse, all being replenished from a central warehouse/outside supplier. For the case where stock-outs occur, the retailers receive transshipments from the support warehouse at an extra cost. A model is presented for cost evaluation and optimization of the reorder points in the system under fill rate constraints. The solution method is designed to handle large real-life systems and is fast enough to be directly implemented in practice. A numerical study illustrates that (i) the model renders near-optimal solutions; (ii) the value of using a support warehouse can be significant even for large transshipment costs; and (iii) significant cost savings can be obtained using the proposed model. Using real data for a sample of 50 representative products, the proposed model reduces the expected holding and transshipment costs by 29% while still meeting target fill rates. [Supplemental materials are available for this article. Go to the publisher's online edition of IIE Transactions to view the supplemental file.] (Less)
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author
; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
spare parts, Inventory, multi-echelon, stochastic demand, transshipments
in
IIE Transactions
volume
45
issue
3
pages
309 - 322
publisher
Taylor & Francis
external identifiers
  • wos:000312592000006
  • scopus:84876728863
ISSN
0740-817X
DOI
10.1080/0740817X.2012.706375
language
English
LU publication?
yes
id
6c94cebd-804f-4597-ab06-c039b6db1c87 (old id 2019126)
date added to LUP
2016-04-01 10:06:33
date last changed
2020-09-30 01:14:34
@article{6c94cebd-804f-4597-ab06-c039b6db1c87,
  abstract     = {<b>Abstract in Undetermined</b><br/><br>
This article considers a distribution inventory system consisting of N retailers and a regional support warehouse, all being replenished from a central warehouse/outside supplier. For the case where stock-outs occur, the retailers receive transshipments from the support warehouse at an extra cost. A model is presented for cost evaluation and optimization of the reorder points in the system under fill rate constraints. The solution method is designed to handle large real-life systems and is fast enough to be directly implemented in practice. A numerical study illustrates that (i) the model renders near-optimal solutions; (ii) the value of using a support warehouse can be significant even for large transshipment costs; and (iii) significant cost savings can be obtained using the proposed model. Using real data for a sample of 50 representative products, the proposed model reduces the expected holding and transshipment costs by 29% while still meeting target fill rates. [Supplemental materials are available for this article. Go to the publisher's online edition of IIE Transactions to view the supplemental file.]},
  author       = {Axsäter, Sven and Howard, Christian and Marklund, Johan},
  issn         = {0740-817X},
  language     = {eng},
  number       = {3},
  pages        = {309--322},
  publisher    = {Taylor & Francis},
  series       = {IIE Transactions},
  title        = {A distribution inventory model with transshipments from a support warehouse},
  url          = {http://dx.doi.org/10.1080/0740817X.2012.706375},
  doi          = {10.1080/0740817X.2012.706375},
  volume       = {45},
  year         = {2013},
}