article

Pooling in Two-Location Inventory Systems with Non-Negligible Replenishment Lead Times

Authors:

George Tagaras,

Morris A. CohenAuthors Info & Claims

Management Science, Volume 38, Issue 8

Pages 1067 - 1083

Published: 01 August 1992 Publication History

Abstract

This paper deals with the analysis of two-location periodic review inventory systems with non-negligible replenishment lead times. Emergency transshipments are used in these systems as a recourse action to reduce the occurrence of shortages. A class of partial pooling policies is proposed for the control of transshipments. The cost performance of this class of policies is shown to be inferior to that of complete pooling. An approximate model and a heuristic algorithm are introduced to compute near-optimal stocking policy solutions. Comparisons with simulation results verify the satisfactory performance of the approximate model and algorithm. Numerical sensitivity analysis provides additional insight into the nature of optimal transshipment behavior.

References

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HOADLEY, B. AND D. P. HEYMAN, "A Two-echelon Inventory Model with Purchases, Dispositions, Shipments, Returns and Transshipments," Naval Res. Logist. Quart., 24 (1977), 1-19.

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KARMARKAR, U. S., "Policy Structure in Multistate Production-Inventory Problems: An Application of Convex Analysis." in Multilevel Production/Inventory Control Systems: Theory and Practice, L. B. Schwarz (Ed.), TIMS, North-Holland, New York, 1981a.

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KARMARKAR, U. S. AND N. R. PATEL, "The One-Period, N-Location Distribution Problem," Naval Res. Logtst. Quart., 24 (1977), 559-575.

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TAGARAS, G., "Effects of Pooling on the Optimization and Service Levels of Two-Location Inventory Systems," IIE Trans., 21, 3 (1989), 250-257.

Cited By

Zhang CAyer TWhite CBodeker JRoback J(2023)Inventory Sharing for Perishable ProductsOperations Research10.1287/opre.2022.241071:5(1756-1776)Online publication date: 1-Sep-2023
https://dl.acm.org/doi/10.1287/opre.2022.2410
Jin ZWang YLim YPan KShen Z(2023)Vehicle Rebalancing in a Shared Micromobility System with Rider CrowdsourcingManufacturing & Service Operations Management10.1287/msom.2023.119925:4(1394-1415)Online publication date: 1-Jul-2023
https://dl.acm.org/doi/10.1287/msom.2023.1199
Wang XZhong YLi LXie WYe Z(2022)Warranty Reserve ManagementManufacturing & Service Operations Management10.1287/msom.2022.108624:4(2221-2239)Online publication date: 1-Jul-2022
https://dl.acm.org/doi/10.1287/msom.2022.1086
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Index Terms

Pooling in Two-Location Inventory Systems with Non-Negligible Replenishment Lead Times
1. Applied computing
  1. Enterprise computing
  2. Operations research
    1. Industry and manufacturing
2. Computing methodologies
  1. Artificial intelligence
    1. Search methodologies
      1. Heuristic function construction
  2. Modeling and simulation
    1. Model development and analysis
      1. Model verification and validation

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Published In

cover image Management Science

Management Science Volume 38, Issue 8

August 1992

150 pages

ISSN:0025-1909

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Publisher

INFORMS

Linthicum, MD, United States

Publication History

Published: 01 August 1992

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Cited By

Zhang CAyer TWhite CBodeker JRoback J(2023)Inventory Sharing for Perishable ProductsOperations Research10.1287/opre.2022.241071:5(1756-1776)Online publication date: 1-Sep-2023
https://dl.acm.org/doi/10.1287/opre.2022.2410
Jin ZWang YLim YPan KShen Z(2023)Vehicle Rebalancing in a Shared Micromobility System with Rider CrowdsourcingManufacturing & Service Operations Management10.1287/msom.2023.119925:4(1394-1415)Online publication date: 1-Jul-2023
https://dl.acm.org/doi/10.1287/msom.2023.1199
Wang XZhong YLi LXie WYe Z(2022)Warranty Reserve ManagementManufacturing & Service Operations Management10.1287/msom.2022.108624:4(2221-2239)Online publication date: 1-Jul-2022
https://dl.acm.org/doi/10.1287/msom.2022.1086
Acimovic JGraves S(2017)Mitigating Spillover in Online Retailing via ReplenishmentManufacturing & Service Operations Management10.1287/msom.2016.061419:3(419-436)Online publication date: 1-Jul-2017
https://dl.acm.org/doi/10.1287/msom.2016.0614
Feng PFung RWu F(2017)Preventive transshipment decisions in a multi-location inventory system with dynamic approachComputers and Industrial Engineering10.1016/j.cie.2016.12.005104:C(1-8)Online publication date: 1-Feb-2017
https://dl.acm.org/doi/10.1016/j.cie.2016.12.005
Lau HHo GChan TTsui W(2014)An innovation approach for achieving cost optimization in supply chain managementJournal of Intelligent & Fuzzy Systems: Applications in Engineering and Technology10.5555/2596321.259633826:1(173-192)Online publication date: 1-Jan-2014
https://dl.acm.org/doi/10.5555/2596321.2596338
Arora HRaghu TVinze A(2012)Decision support for containing pandemic propagationACM Transactions on Management Information Systems10.1145/2070710.20707142:4(1-25)Online publication date: 5-Jan-2012
https://dl.acm.org/doi/10.1145/2070710.2070714
Hsu VZhu K(2011)Tax-Effective Supply Chain Decisions Under China's Export-Oriented Tax PoliciesManufacturing & Service Operations Management10.1287/msom.1100.031213:2(163-179)Online publication date: 1-Apr-2011
https://dl.acm.org/doi/10.1287/msom.1100.0312
özdemir DYücesan EHerer YDunkin AIngalls R(2009)Sample average approximation approach to multi-location transshipment problem with capacitated productionWinter Simulation Conference10.5555/1995456.1995782(2384-2394)Online publication date: 13-Dec-2009
https://dl.acm.org/doi/10.5555/1995456.1995782
Ekren BHeragu SJefferson TFowler JIngalls R(2008)Simulation based optimization of multi-location transshipment problem with capacitated transportationProceedings of the 40th Conference on Winter Simulation10.5555/1516744.1517206(2632-2638)Online publication date: 7-Dec-2008
https://dl.acm.org/doi/10.5555/1516744.1517206
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