Title: Inventory distribution problem via stochastic programming

Authors: Takayuki Shiina; Masayuki Umeda; Jun Imaizumi; Susumu Morito; Chunhui Xu

Addresses: Chiba Institute of Technology, 2-17-1 Tsudanuma, Narashino, Chiba 275-0016, Japan ' Panasonic Information Technology Solutions, 600 Saedo-cho, Tsuzuki-ku, Yokohama City, Kanagawa 224-8539, Japan ' Toyo University, 5-28-20 Hakusan, Bunkyo-ku, Tokyo 112-8606, Japan ' Waseda University, 3-4-1 Okubo, Shinjuku-ku, Tokyo 169-8555, Japan ' Chiba Institute of Technology, 2-17-1 Tsudanuma, Narashino, Chiba 275-0016, Japan

Abstract: Previous research on inventory distributions between local warehouses or retailers (bases) has focused separately on either of two types of stock transshipment policies: preventive lateral transshipments or emergency lateral transshipments. Each of these has its advantages and disadvantages, and combining these policies may well enable merchandisers to achieve higher service levels. Thus, the combined use of these policies is the focus of the present study. A stochastic programming problem is formulated with demand as a stochastic variable, and the policy of using both preventive and emergency lateral transshipment is examined for its effectiveness while solution methods are examined for their efficiency.

Keywords: stochastic programming; L-shaped method; inventory distribution; stock transshipment.

DOI: 10.1504/AJMSA.2014.064323

Asian Journal of Management Science and Applications, 2014 Vol.1 No.3, pp.261 - 277

Received: 26 Jul 2013
Accepted: 30 May 2014

Published online: 28 Aug 2014 *

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