Authors: Yigal Gerchak
Addresses: Department of Industrial Engineering, Tel-Aviv University, Tel-Aviv 69978, Israel
Abstract: When demands are uncertain, complete inventory pooling is known to be a better strategy than no pooling if the trans-shipment cost is low enough; otherwise, pooling is undesirable. But are there situations where pooling some inventories, but not the rest, in a central warehouse, are the best strategy? We show that such is indeed the case for certain demand distributions and cost parameter values. We show it for a symmetric discrete demand scenario, as well as for a symmetric continuous demand scenario.
Keywords: inventory pooling; trans-shipment; partial pooling.
International Journal of Inventory Research, 2017 Vol.4 No.1, pp.44 - 60
Available online: 03 Jul 2017 *Full-text access for editors Access for subscribers Free access Comment on this article