Two-Echelon Inventory Model With Service Consideration and Lateral Transshipment

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Abstract: This paper considers a two-echelon inventory system with service consideration and lateral transshipment. So far, researchers have not extensively considered the use of lateral transshipment for such systems. Demand arrivals at both echelons follow the Poisson process. We introduce a continuous review base stock policy for the system in steady state, which determined the expected level for on-hand inventory, expected lateral transshipment level and expected backorder level. We showed that the model satisfied convexity with respect to base stock level. Computational experiments showed that the model with lateral transshipment performed better that the model without lateral transshipment.

WSEAS Transactions on Systems, ISSN / E-ISSN: 1109-2777 / 2224-2678, Volume 20, 2021, Art. #13

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Samuel Chiabom Zelibe, Unanaowo Nyong Bassey, "Two-Echelon Inventory Model With Service Consideration and Lateral Transshipment," WSEAS Transactions on Systems, vol. 20, pp. 108-123, 2021, DOI:10.37394/23202.2021.20.13
Samuel Chiabom Zelibe, Unanaowo Nyong Bassey. Two-Echelon Inventory Model With Service Consideration and Lateral Transshipment. WSEAS Transactions on Systems. 2021;20:108-123. 10.37394/23202.2021.20.13
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