Benefits of hybrid lateral transshipments in multi-item inventory systems under periodic replenishment

Glazebrook, Kevin and Paterson, Colin and Rauscher, Sandra and Archibald, Thomas (2015) Benefits of hybrid lateral transshipments in multi-item inventory systems under periodic replenishment. Production and Operations Management, 24 (2). pp. 311-324. ISSN 1059-1478

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Lateral transshipments are a method of responding to shortages of stock in a network of inventory-holding locations. Conventional reactive approaches only seek to meet immediate shortages. The study proposes hybrid transshipments which exploit economies of scale by moving additional stock between locations to prevent future shortages in addition to meeting immediate ones. The setting considered is motivated by retailers who operate networks of outlets supplying car parts via a system of periodic replenishment. It is novel in allowing non-stationary stochastic demand and general patterns of dependence between multiple item types. The generality of our work makes it widely applicable. We develop an easy-to-compute quasi-myopic heuristic for determining how hybrid transshipments should be made. We obtain simple characterizations of the heuristic and demonstrate its strong cost performance in both small and large networks in an extensive numerical study.

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Journal Article
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Production and Operations Management
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This is the peer reviewed version of the following article: Glazebrook, K. , Paterson, C. , Rauscher, S. and Archibald, T. (2015), Benefits of Hybrid Lateral Transshipments in Multi‐Item Inventory Systems under Periodic Replenishment. Prod Oper Manag, 24: 311-324. doi:10.1111/poms.12233 which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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24 Feb 2014 09:39
Last Modified:
18 Sep 2023 00:47