Evaluation of two transshipment policies in a two-location decentralized inventory system under partial backordering

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)207-224
Journal / PublicationTransportation Research Part E: Logistics and Transportation Review
Volume118
Online published10 Aug 2018
Publication statusPublished - Oct 2018

Abstract

This research investigates the replenishment and transshipment decisions in a two-retailer inventory system with a single selling season. Both emergency lateral transshipment (ELT) and preventive lateral transshipment (PLT) are investigated. ELT satisfies partial backordering. We prove the existence of unique Nash equilibrium for the system under each policy. The results show that the ELT solution is independent of the transshipment price while the PLT solution converges to the newsvendor solution as the transshipment price increases. Numerical analysis is presented to illustrate the advantage of each policy. This study assists retailers in deciding which transshipment policy should be preferred.

Research Area(s)

  • Emergency transshipment, Nash equilibrium, Partial backordering, Preventive transshipment, Supply chain

Citation Format(s)

Evaluation of two transshipment policies in a two-location decentralized inventory system under partial backordering. / Feng, Pingping; Wu, Feng; Fung, Richard Y.K.; Jia, Tao.

In: Transportation Research Part E: Logistics and Transportation Review, Vol. 118, 10.2018, p. 207-224.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review