Purpose: Preventivelateral transshipment can respond to customers who will choose a substitute or to give up when the product is out of stock. Motivatedby the common practice, adecision-making model of preventive lateral transshipment with multi sellingperiods is developed. The purpose of the paper is to explore the optimal preventive lateral transshipment policy with multi selling periods. Design/methodology/approach: With adiscrete-time dynamic programming model, we take a dynamic programming approach and adopt backward induction to analyze two retailers’ preventive lateral transshipment policy. Findings: The optimal preventivelateral transshipment policy is a threshold policy which depends on both theremaining selling periods and inventory level. The above properties ensure thattwo retailers can control inventory with preventive lateral transshipment. Practical implications: The retailer can adjust inventory via the thresholdtype policy. The simple decisionrule which compares on-hand inventory level with the critical inventory level can be used to control inventory by preventive lateral transshipment. Originality/value: A discrete-timedecision-making model of preventive lateral transshipment policy isformulated. This model takes consideration of multi selling periods, whichis different from most existing researches on preventive lateraltransshipment. ; Peer Reviewed
Inventory control policy of preventive lateral transshipment between retailers in multi periods
2014-07-01
Aufsatz (Zeitschrift)
Elektronische Ressource
Englisch
Àrees temàtiques de la UPC::Economia i organització d'empreses::Direcció d'operacions::Modelització de transports i logística , Business logistics -- Mathematical models , Preventive lateral transshipment , The transship-up-to level , The transship-down-to level , Inventory control policy , Multi selling periods , Logística (Indústria) -- Models matemàtics
DDC: | 629 |
Inventory control policy of preventive lateral transshipment between retailers in multi periods
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