Browsing by Subject "Inventory Sharing"
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Item Open Access Managing transshipments in a multi-retailer system with approximate policies(Palgrave Macmillan, 2015) Comez, N.; Fescioglu Unver, N.Using the right transshipment policy is important when transshipments are exercised under demand uncertainty. Optimal transshipment policy can be quite complex in a multi-firm system as optimal actions depend on all system variables. Moreover, both how to select requested retailer and how to respond to requests are in question. We introduce simple, close-to-optimal heuristic transshipment policies for multiple retailers. We first show that heuristic policies may perform even better than self-optimal policy, which is explained by Braess’s paradox. Then we test the performances of various heuristics with respect to centrally optimal policy. When retailers can observe others’ inventory levels, more effective transshipments can be made. Otherwise, a random selection performs quite well. We also observe that although always-accept respond policy is quite close to centrally optimal in small systems, the performance of pairwise-optimal holdback levels to respond requests is more clear and consistent for larger systems.Item Open Access Optimal transshipments and reassignments under periodic orcyclic holding cost accounting(Palgrave Macmillan, 2013) Çömez, N.; Stecke, K. E.; Çakanyıldırım, M.In a centrally managed system, inventory at a retailer can be transshipped to a stocked-out retailer to meet demand. As the inventory at the former retailer may be demanded by future customers of that retailer and transshipment time/cost is non-negligible, it can be more profitable to not transship in some situations. When unsatisfied demand is backordered, reassignment of inventory to a previously backordered demand can perhaps become profitable as demand uncertainty resolves over time. Despite this intuition, we prove that no reassignments are necessary for cost optimality under periodic holding cost accounting in a two-retailer system. This remains valid for multi-retailer systems according to numerical analyses. When holding costs are accounted for only at the end of each replenishment cycle, reassignments are necessary for optimality but insignificant in reducing the total cost. In most instances tested, the decrease in total cost from reassignments is below 2% for end of cycle holding cost accounting. These results simplify transshipment policies and facilitate finding good policies in both implementation and future studies, as reassignments can be omitted from consideration in optimization models under periodic holding cost accounting and in approximation models under cyclical cost accounting.