Coordinating preventive lateral transshipment between two locations

Li, Xiaohong; Sun, Lei; Gao, Jie

doi:10.1016/j.cie.2013.08.023

Cited by 25 publications

(14 citation statements)

References 19 publications

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“…Logistics decisions of apparel retailers include initial ordering before the season begins, allocation to the branches at the beginning of the season, and eventually phasing-out of the products at the end of the selling season. Increasingly, however, retailers are also practicing what is called "transshipment" or "transfer" policies, which involve the reallocation of products among retail branches in mid-season (Li et al 2013). These policies help retailers to reduce stock-outs as well as excess inventories.…”

Section: Introductionmentioning

confidence: 99%

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

Naderi

Kılıç

Daşçı

2020

International Journal of Production Economics

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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.

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Section: Introductionmentioning

confidence: 99%

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

Naderi

Kılıç

Daşçı

2020

International Journal of Production Economics

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“…However, in the process of transshipment, the transit process will be accompanied by many additional changes in cost and demand information, which will affect the effectiveness of multimodal transport decisionmaking. Therefore, it is necessary to consider information updating in the optimization of multimodal transport [39,40], in order to ensure the significance of changing from unimodal transport to multimodal transport.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Although Li et al [40] combine demand information updating with safe multimodal transport, they only study the problem of multimodal transport safety inventory between two distribution departments at the same level, without considering the impact of transshipment on superior suppliers. This paper considers a multimodal transport supply network consisting of a production department M and two distribution departments i (i = 1, 2).…”

Section: Problem Descriptionmentioning

confidence: 99%

“…Because of the trade secrets involved, the relevant production and sales data of the women's long skirt products launched by the company are processed accordingly. At the same time, referring to the needs of Choi et al [39] and Li et al [40] for the calculation of relevant parameters, the relevant data are set as follows.…”

Section: Multimodal Transport Network Model Considering Security Invementioning

confidence: 99%

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Multimodal Transport Network Optimization Considering Safety Stock under Real-Time Information

Chen

Song

et al. 2019

Discrete Dynamics in Nature and Society

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A production department and two distribution departments form a multimodal logistics supply network. The production department provides two ordering opportunities within one production cycle, and the real-time updates of demand information are required in the interval between two orders. Based on this, the paper studies the security inventory optimization problem of multimodal transport networks. On the basis of portraying the real-time information update process, the multimodal network optimization model without considering safety stock and the multimodal network optimization model considering safety stock are constructed, respectively, and the transshipment price and demand information of the intermodal network are updated. The parameters are analyzed for sensitivity. The analysis of examples shows that, on the one hand, with the update of demand information, the distribution department adopts the multimodal transport model with safety stock to improve the profit of the distribution department and the supply network. On the other hand, the production sector can meet market demand with a lower production scale, while the distribution department can effectively respond to stochastic demand through a multimodal model with safety stock.

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“…They find that the sufficient condition for the existence of coordinating transshipment prices is more restrictive under supply capacity uncertainty and limitation than in the case of infinite capacity. Li, Sun, and Gao (2013) discuss the coordination problem of preventive bidirectional lateral transshipments between two independent locations and propose a bidirectional revenue sharing contract to coordinate the system. Zou, Dresner, and Windle (2010) consider a two-location inventory model with transshipments in a competitive environment.…”

Section: Literaturementioning

confidence: 99%

Risk pooling via unidirectional inventory transshipments in a decentralized supply chain

Arıkan

Silbermayr

2017

International Journal of Production Research

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We study risk pooling via unidirectional lateral transshipments between two locations under local decision-making. Unidirectional transshipments can be applicable when cost structures and/or capabilities differ between locations, and it is also a common practice in dual channel supply chains with online and offline sales channels. We show that such a system cannot be coordinated only with varying transshipment prices. The transshipment receiver orders more and the transshipment giver orders less than the respective optimal centralised order quantities. In order to remove this discrepancy, we suggest horizontal coordination mechanisms by introducing a leftover subsidy for the location providing the transshipments or a shortage subsidy for the location receiving transshipments as well as a combination of shortage and leftover subsidy. Further, we evaluate the impact of network structure by comparing the equilibrium order quantities and profits under the uni-and bidirectional systems as well as a system without transshipments. Since demand correlation is a critical aspect in risk pooling we provide a detailed numerical study to discuss its impact on our findings.

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Coordinating preventive lateral transshipment between two locations

Cited by 25 publications

References 19 publications

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

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

Multimodal Transport Network Optimization Considering Safety Stock under Real-Time Information

Risk pooling via unidirectional inventory transshipments in a decentralized supply chain

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