A deterministic model for the transshipment problem of a fast fashion retailer under capacity constraints

Abstract

In this paper we present a novel transshipment problem for a large apparel retailer that operates an extensive retail network. Our problem is inspired by the logistics operations of a very large fast fashion retailer in Turkey, LC Waikiki, with over 450 retail branches and thousands of products. The purpose of transshipments is to rebalance stocks across the retail network to better match supply with demand. We formulate this problem as a large mixed integer linear program and develop a Lagrangian relaxation with a primal-dual approach to find upper bounds and a simulated annealing based metaheuristic to find promising solutions, both of which have proven to be quite effective.While our metaheuristic does not always produce better solutions than a commercial optimizer, it has consistently produced solutions with optimality gaps lower than 7% while the commercial optimizer may produce very poor solutions with optimality gaps as high as almost 300%. We have also conducted a set of numerical experiments to uncover implications of various operational practices of LC Waikiki on its system's performance and important managerial insights.

Case study on simulation analysis of a logistics network with multiple products by applying lateral transshipments algorithms

“…The novelty of our model lies in other multiple factors such as the embedded possibility to simulate the company’s distribution network processes according to three different configurations: standard flows, traditional LT flows and ILT flows. On another side, the results of the new algorithm are more complete than the traditional one because it includes in the decision multiple factors that exploit better the resources of the distribution system (Naderi et al , 2020). But to achieve these benefits, there may be some barriers.…”

“…Regarding the second research gap, there is a significant lack of literature that tries to improve and evaluate the LT algorithm (Naderi et al, 2020). Therefore, the third research question of the paper is as follows:…”

“…But to the best of our knowledge, there is very limited empirical research on LTs and very few of them consider multiple products. Moreover, the LT algorithm, which is quite successful in theoretical studies, is required to be modified because of stochastic customer demand in reality (Naderi et al , 2020). Hence, developing an efficient logistics network using LTs for multiple products will be the main aim for most companies.…”

A digitális transzformáció megjelenése a divatipari értékesítési gyakorlatokban

“…A divatiparon belül működő cégek egyik üzleti modellje a fast fashion, amelynek az a célja, hogy az ezt a modellt alkalmazó divatipari szervezet minél gyorsabban reagáljon a legújabb divattrendekre és gyakran frissítse az üzleteiben kapható ruházati termékeinek készletét (Zamani et al, 2017). A kifejezést az 1980-as években, az Amerikai Egyesült Államokban használták először, ám igazán "népszerűvé" és ismertté a Zara tette (Naderi et al, 2020). A "fast" vagyis "gyors" kifejezés, hűen szemlélteti azt a fajta gyorsaságot, amelyben a trendek a kifutókról az üzletekbe kerülnek.…”

An efficient stochastic programming approach for solving integrated multi-objective transportation and inventory management problem using goodness of fit

“…Minimizing the overall shipping cost, delivery time and backorder level has been considered to be the three fuzzy goals defined by a piecewise linear membership function. Naderi et al (2020) introduced a new innovative trans-shipment problem inspired by the activity of LC Waikiki, Turkey's largest retail network store with more than 475 divisions of distribution and thousands of items. Trans-shipments are planned to re-equilibrize stocks throughout the distribution network, in order to meet demand.…”