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Warehouse capacity sharing via transshipment for an integrated two-echelon supply chain

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  • Feng, Xuehao
  • Moon, Ilkyeong
  • Ryu, Kwangyeol

Abstract

Warehouse capacity constraint has been one obstacle to achieving the channel-wide optimal decision in inventory management. We studied an integrated inventory model consisting of a single vendor and multiple buyers with warehouse capacity sharing via transshipment. We proposed an optimal transshipment policy by developing nonlinear programming models and genetic algorithms as well as obtaining Karush-Kuhn-Tucker points. This inventory policy can significantly reduce the channel-wide cost and the performance is influenced by the consideration of fixed transshipment costs. Sensitivity analyses show that parameters have different impacts on the channel-wide cost and the performances of the algorithms.

Suggested Citation

  • Feng, Xuehao & Moon, Ilkyeong & Ryu, Kwangyeol, 2017. "Warehouse capacity sharing via transshipment for an integrated two-echelon supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 17-35.
    • Handle: RePEc:eee:transe:v:104:y:2017:i:c:p:17-35
    DOI: 10.1016/j.tre.2017.04.014
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    Cited by:

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    3. Feng, Pingping & Wu, Feng & Fung, Richard Y.K. & Jia, Tao, 2018. "Evaluation of two transshipment policies in a two-location decentralized inventory system under partial backordering," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 207-224.
    4. Jeong, Yoonjea & Saha, Subrata & Chatterjee, Debajyoti & Moon, Ilkyeong, 2018. "Direct shipping service routes with an empty container management strategy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 123-142.
    5. Seung Yoon Ko & Ratna Permata Sari & Muzaffar Makhmudov & Chang Seong Ko, 2020. "Collaboration Model for Service Clustering in Last-Mile Delivery," Sustainability, MDPI, vol. 12(14), pages 1-18, July.
    6. Qin, Xuelian & Liu, Zhixue & Tian, Lin, 2020. "The strategic analysis of logistics service sharing in an e-commerce platform," Omega, Elsevier, vol. 92(C).
    7. Adam Marcysiak, 2020. "The scope of diversification of the warehouse space market in a regional configuration," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 10-23, September.
    8. Davide Castellano & Mosè Gallo & Liberatina C. Santillo, 2021. "A periodic review policy for a coordinated single vendor-multiple buyers supply chain with controllable lead time and distribution-free approach," 4OR, Springer, vol. 19(3), pages 347-388, September.
    9. Jackson, Jonathan E. & Munson, Charles L., 2019. "Common replenishment cycle order policies for multiple products with capacity expansion opportunities and quantity discounts," International Journal of Production Economics, Elsevier, vol. 218(C), pages 170-184.
    10. Elleuch Fadoi & Semi Boudabbous, 2021. "Application of Transshipment in the Supply Chain Management in Tunisia," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 11(4), pages 81-103.
    11. Cavagnini, Rossana & Bertazzi, Luca & Maggioni, Francesca, 2022. "A rolling horizon approach for a multi-stage stochastic fixed-charge transportation problem with transshipment," European Journal of Operational Research, Elsevier, vol. 301(3), pages 912-922.
    12. Zhang, Peng & Xu, Xiaofeng & Shi, Victor & Zhu, Jing, 2020. "Simultaneous inventory competition and transshipment between retailers," International Journal of Production Economics, Elsevier, vol. 230(C).
    13. Cheng, Lihong & Guo, Xiaolong & Li, Xiaoxiao & Yu, Yugang, 2022. "Data-driven ordering and transshipment decisions for online retailers and logistics service providers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    14. Juanjuan Qin & Kun Wang & Ziping Wang & Liangjie Xia, 2020. "Revenue sharing contracts for horizontal capacity sharing under competition," Annals of Operations Research, Springer, vol. 291(1), pages 731-760, August.
    15. Li, Lin & Li, Guo, 2023. "Integrating logistics service or not? The role of platform entry strategy in an online marketplace," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    16. Liu, Shuai & Hua, Guowei & Cheng, T.C.E. & Dong, Jingxin, 2021. "Unmanned vehicle distribution capacity sharing with demand surge under option contracts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).

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