The Multi-Location Transshipment Problem with Positive Replenishment Lead Times

Transshipments, monitored movements of material at the same echelon of a supply chain, represent an effective pooling mechanism. With a single exception, research on transshipments overlooks replenishment lead times. The only approach for two-location inventory systems with non-negligible lead times could not be generalized to a multi-location setting, and the proposed heuristic method cannot guarantee to provide optimal solutions. This paper uses simulation optimization by combining an LP/network flow formulation with infinitesimal perturbation analysis to examine the multi-location transshipment problem with positive replenishment lead times, and demonstrates the computation of the optimal base stock quantities through sample path optimization. From a methodological perspective, this paper deploys an elegant duality-based gradient computation method to improve computational efficiency. In test problems, our algorithm was also able to achieve better objective values than an existing algorithm.Transshipment;Infinitesimal Perturbation Analysis (IPA);Simulation Optimization

Optimization of multi-echelon inventory development in a finished goods network

Thesis (M.Eng.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 1999.Includes bibliographical references (leaves 41-42).by Po-Hsin Liu.M.Eng

Inventory models with lateral transshipments : a review

Lateral transshipments within an inventory system are stock movements between locations of the same echelon. These transshipments can be conducted periodically at predetermined points in time to proactively redistribute stock, or they can be used reactively as a method of meeting demand which cannot be satised from stock on hand. The elements of an inventory system considered, e.g. size, cost structures and service level denition, all in uence the best method of transshipping. Models of many dierent systems have been considered. This paper provides a literature review which categorizes the research to date on lateral transshipments, so that these dierences can be understood and gaps within the literature can be identied

An Innovative Business Model for a Multi-echelon Supply Chain Inventory Management Pattern

Nowadays, companies are experimenting novel organizational solutions to efficiently operate in uncertain and highly dynamic scenarios. As a potential solution, this paper proposes a new business model for a multi-echelon Supply Chain inventory management pattern. Specifically, an inventory model with proactive lateral transshipments was developed and subsequently tested carrying out 288 experiments with the aim of assessing transshipments impact on the performance of a two-echelon Supply Chain. The final goal was to investigate the potential reduction of the overall cost of the enterprise and, conversely, whether this approach could promote significant improvements in the level of service, achievable through a more efficient management of resources. The analyses and simulations indicate the use of large batches and/or low-cost products did not demand the necessity of transshipment events. These preliminary findings could be potentially validated and tested in the future considering more complex networks or multiple products

Multilocation Inventory Systems With Centralized Information.

The management of multi-echelon inventory systems has been both an important and challenging research area for many years. The rapid advance in information technology and the emphasis on integrated supply chain management have new implications for the successful operation of distribution systems. This research focuses on the study of some fundamental issues related to the operation of a multilocation inventory system with centralized information. First, we do a comparative analysis to evaluate the overall performance of individual versus centralized ordering policies for a multi-store distribution system where centralized information is available. This study integrates the existing research and clarifies one of the fundamental questions facing inventory managers today: whether or not ordering decisions should be centralized. Next, we consider a multi-store distribution system where emergency transshipments are permitted among these stores. Based on some simplifying assumptions, we develop an integrated model with a joint consideration of inventory and transshipment components. An approximately optimal (s, S) policy is obtained through a dynamic programming technique. This ordering policy is then compared with a simplified policy that assumes free and instantaneous transshipments. We also examine the relative performance of base stock policies for a centralized-ordering distribution system. Numerical studies are provided to give general guidelines for use of the policies

Multi-echelon Repair Inventory Systems: Select Issues in Modular Electronic Equipment

Flow of modules/printed circuit boards (PCBs) in a multi-echelon repair inventory system pertaining to modular electronic equipment for large maintenance organisations having large inventory in range and depth, like defence has been critically examined using a case study. Desirable features of the proposed system are identified and a general framework suggested for examining its feasibility and implementation in an organisation. An analytical model with an objective to reduce number of echelons is also suggested and compared with the base model. It is suggested that various models can be compared through simulation and their performance measured using balanced scorecard approach.Defence Science Journal, 2010, 60(5), pp.514-524, DOI:http://dx.doi.org/10.14429/dsj.60.57

Evolutionary multiobjective optimization of the multi-location transshipment problem

We consider a multi-location inventory system where inventory choices at each location are centrally coordinated. Lateral transshipments are allowed as recourse actions within the same echelon in the inventory system to reduce costs and improve service level. However, this transshipment process usually causes undesirable lead times. In this paper, we propose a multiobjective model of the multi-location transshipment problem which addresses optimizing three conflicting objectives: (1) minimizing the aggregate expected cost, (2) maximizing the expected fill rate, and (3) minimizing the expected transshipment lead times. We apply an evolutionary multiobjective optimization approach using the strength Pareto evolutionary algorithm (SPEA2), to approximate the optimal Pareto front. Simulation with a wide choice of model parameters shows the different trades-off between the conflicting objectives