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Inventory Management with Transshipments Under Fill Rate Constraints

In: Operations Research Proceedings 2013

Author

Listed:
  • Andreas Serin

    (Universität Duisburg-Essen)

  • Bernd Hillebrand

    (Technische Universität Dortmund)

Abstract

Transshipments enable supply chains to reduce inventories while maintaining fill rates by sharing stored goods between different locations. In this paper, the supply chain is composed of the external manufacturer, the central warehouse and three identical retail outlets. Transshipment lead times are assumed to be negligible, while supply lead times are assumed to be deterministic as long as the sender is not out of stock. Any demand that cannot be satisfied immediately or after transshipments is lost or backlogged. A quick approximation method to estimate the expected transshipment quantities is provided. Simulation results strongly support the fit of the approximation. Numerical studies confirm the effect of lead time demand distributions on several performance measures.

Suggested Citation

  • Andreas Serin & Bernd Hillebrand, 2014. "Inventory Management with Transshipments Under Fill Rate Constraints," Operations Research Proceedings, in: Dennis Huisman & Ilse Louwerse & Albert P.M. Wagelmans (ed.), Operations Research Proceedings 2013, edition 127, pages 437-442, Springer.
    • Handle: RePEc:spr:oprchp:978-3-319-07001-8_59
    DOI: 10.1007/978-3-319-07001-8_59
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