The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Evaluation of Unidirectional Lateral Transshipments and Substitutions in Inventory Systems

På svenska

Author

  • Sven Axsäter

Summary, in English

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.

Publishing year

2003

Language

English

Pages

438-447

Publication/Series

European Journal of Operational Research

Volume

149

Issue

2

Document type

Journal article

Publisher

Elsevier

Topic

  • Transport Systems and Logistics

Keywords

  • Emergency transshipments
  • Stochastic demand
  • Inventory
  • Substitution

Status

Published

ISBN/ISSN/Other

  • ISSN: 0377-2217