Browsing by Subject "Transshipment"

Now showing 1 - 3 of 3

Open Access
Analysis of a decentralized supply chain under partial cooperation
(2005) Güllü, R.; Van Houtum G. J.; Sargut F. Z.; Erkip, N.
In this article, we analyze a decentralized supply chain consisting of a supplier and two independent retailers. In each order cycle, retailers place their orders at the supplier to minimize inventory-related expected costs at the end of their respective response times. There are two types of lead times involved. At the end of the supplier lead time, retailers are given an opportunity to readjust their initial orders (without changing the total order size), so that both retailers can improve their expected costs at the end of respective retailer lead times (the time it takes for items to be shipped from the supplier to the retailers). Because of the possibility of cooperation at the end of supplier lead time, each retailer will consider the other's order-up-to level in making the ordering decision. Under mild conditions, we prove the existence of a unique Nash equilibrium for the retailer order-up-to levels, and show that they can be obtained by solving a set of newsboy-like equations. We also present computational analysis that provides valuable managerial insight for design and operation of decentralized systems under the possibility of partial cooperation.
Embargo
Multi-plant manufacturing assortment planning in the presence of transshipments
(Elsevier BV, 2023-05-31) Dolgan, Nagihan Çömez; Dağ, Hilal; Ünver, Nilgün Fescioğlu; Şen, Alper
In this study, we consider the assortment planning problem of a manufacturing firm with multiple plants. Making a plant capable of producing a product is costly, therefore the firm cannot manufacture every product in every plant. In case a customer’s order in a particular region is not available in the closest plant, another plant can ship the product using transshipment, but at an extra transportation cost. If a demanded product is not produced in any plant, substitution from first choice to a second choice is also considered, which can be either satisfied by the closest plant, or by transshipment. The problem is to jointly determine assortments in all plants such that total profit after assortment and transshipment costs is maximized. The resulting problem is complex as transshipments and substitutions are intertwined to affect assortment decisions. We show that the optimal assortments are nested, i.e., the assortment of a plant with a smaller market share is a subset of the assortment of a plant with a larger share. The common assortment of all locations is shown to be in the popular set (i.e., no leapfrogging in product popularities), and a sufficient condition on substitution rate is derived for each individual assortment to be in the popular set. We conduct an extensive numerical study to understand the effects of allowing transshipments on resulting assortments. Moreover, we introduce approximate assortment planning algorithms that benefit from the derived structural properties, which are shown to generate near-optimal assortments in a broad range of instances tested.
Open Access
Optimal assortment planning under capacity constraint : single and multi-firm systems using transshipments
(2016-08) Cephe, Ecem
To survive in today's competitive market, firms need to meet customer expectations by offering high quality products with high variety. However, there might be some physical and financial constraints limiting the assortment size. The process of finding the optimal product assortment by considering both the benefits of a large assortment as well as the costs and limits of it is known as assortment planning. In this thesis, assortment planning is analyzed under predetermined assortment capacity limits for two cases. First, a single firm's optimal assortment problem is studied to maximize its profits. Second, assortment planning problem of a system of multiple firms is investigated jointly, where firms are interacting through product sharing, called transshipments. Transshipments are known to increase product availability, thus decreasing stock-outs. Transshipments have been always utilized as an emergency demand satisfaction action in support of inventory management in the literature. Differently, in this study, transshipments are evaluated in advance of inventory management while making the assortment planning of firms. In both problems, demand is defined to have an exogenous model, where each customer has a predetermined preference for each product from the potential set. Proportional demand substitutions are also allowed from an out of assortment product to others. The results on the optimal assortment of a single firm are used as a benchmark to the optimal assortments of multiple firms communicating through transshipments. By relying on proven optimality results, it is shown how easily optimal assortments can be obtained compared to a full enumeration. Extensive numerical analyses are reported on the performances of the heuristic algorithm and sensitivity of optimal assortments to system parameters.