Optimal transshipments and reassignments under periodic orcyclic holding cost accounting

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dc.citation.epage1539en_US
dc.citation.issueNumber10en_US
dc.citation.spage1517en_US
dc.citation.volumeNumber64en_US
dc.contributor.authorÇömez, N.en_US
dc.contributor.authorStecke, K. E.en_US
dc.contributor.authorÇakanyıldırım, M.en_US
dc.date.accessioned2015-07-28T12:04:32Z
dc.date.available2015-07-28T12:04:32Z
dc.date.issued2013en_US
dc.departmentDepartment of Managementen_US
dc.description.abstractIn 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.en_US
dc.identifier.doi10.1057/jors.2012.135en_US
dc.identifier.issn0160-5682
dc.identifier.urihttp://hdl.handle.net/11693/13076
dc.language.isoEnglishen_US
dc.publisherPalgrave Macmillanen_US
dc.relation.isversionofhttp://dx.doi.org/10.1057/jors.2012.135en_US
dc.source.titleJournal of the Operational Research Societyen_US
dc.subjectInventory Sharingen_US
dc.subjectCentrally Managed Inventoryen_US
dc.subjectStochastic Inventory Controlen_US
dc.titleOptimal transshipments and reassignments under periodic orcyclic holding cost accountingen_US
dc.typeArticleen_US

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