The use of simple calibrations of the individual locations in making transhipment decisions in a multi-location inventory network

Archibald, T W and Black, D and Glazebrook, K D (2010) The use of simple calibrations of the individual locations in making transhipment decisions in a multi-location inventory network. Journal of the Operational Research Society, 61. pp. 294-305. ISSN 1476-9360

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Abstract

Demands occur at each location in a network of stock-holding retail outlets. Should a location run out of stock between successive replenishments, then subsequent demands may be met either by transshipping from another location in the network or by an emergency supply from a central depot. We deploy an approximate stochastic dynamic programming approach to develop a class of interpretable and implementable heuristics for making transshipment decisions (whether and from where to transship) which make use of simple calibrations of the candidate locations. The calibration for a location depends upon its current stock, the time to its next replenishment and the identity of the location needing stock. A numerical investigation shows strong performance of the proposed policies in comparison with standard industry practice (complete pooling, no pooling) and a recently proposed heuristic. It points to the possibility of substantial cost savings over current practice.

Item Type:
Journal Article
Journal or Publication Title:
Journal of the Operational Research Society
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/aacsb/disciplinebasedresearch
Subjects:
ID Code:
45361
Deposited By:
Deposited On:
11 Jul 2011 18:30
Refereed?:
Yes
Published?:
Published
Last Modified:
11 Mar 2020 03:11