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Consolidation effects: Whether and how inventories should be pooled

Author

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  • Wanke, Peter F.
  • Saliby, Eduardo

Abstract

This paper presents a framework for deciding whether and how inventories should be pooled, using the consolidation effect as a cornerstone tool to measure inventory costs, service levels, and total costs. Based on the random generation of different scenarios, it is indicated the adequacy of inventory centralization, regular transshipments, and independent systems to a given set of demand, lead time, and holding costs characteristics. Sensitivity analyses on mathematical expressions are performed to determine when one alternative is preferable in terms of total costs. Real settings are also presented in light of the framework developed.

Suggested Citation

  • Wanke, Peter F. & Saliby, Eduardo, 2009. "Consolidation effects: Whether and how inventories should be pooled," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(5), pages 678-692, September.
  • Handle: RePEc:eee:transe:v:45:y:2009:i:5:p:678-692
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    Cited by:

    1. repec:eee:reensy:v:112:y:2013:i:c:p:26-37 is not listed on IDEAS
    2. Wang, Wenbin & Yue, Shuai, 2015. "An inventory pooling model for spare units of critical systems that serve multi-companies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 76(C), pages 34-44.
    3. Wanke, Peter F., 2012. "Product, operation, and demand relationships between manufacturers and retailers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 340-354.

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