Multi-location transshipment problem with capacitated production and lost sales
Proceedings of the 38th conference on Winter simulation
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Manufacturing & Service Operations Management
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Management Science
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Manufacturing & Service Operations Management
Winter Simulation Conference
Incentives for Transshipment in a Supply Chain with Decentralized Retailers
Manufacturing & Service Operations Management
Modeling multilocation transshipment with application of stochastic programming approach
IUKM'11 Proceedings of the 2011 international conference on Integrated uncertainty in knowledge modelling and decision making
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Operations Research
Computers and Industrial Engineering
In-Season Transshipments Among Competitive Retailers
Manufacturing & Service Operations Management
Coordinating preventive lateral transshipment between two locations
Computers and Industrial Engineering
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This paper studies how transshipments affect manufacturers and retailers, considering both exogenous and endogenous wholesale prices. For a distribution system where a single manufacturer sells to multiple identical-cost retailers, we consider both the manufacturer being a price taker and the manufacturer being a price setter in a single-period setup under multivariate normal demand distribution. In the case of the manufacturer being a price taker, we provide several analytical results regarding the effects of key parameters on order quantities and profits. In the case of the manufacturer being a price setter, we characterize the Stackelberg game that arises, and provide several insights into how the game dynamics are affected by transshipments. Specifically, we find that risk pooling makes retailers' order quantities less sensitive to the wholesale price set by the manufacturer; hence, in general, the manufacturer benefits from retailers' transshipments by charging a higher wholesale price, while retailers are often worse off. The paper captures the effect of demand correlation and the effect of the number of retailers throughout, and it illustrates the findings by a numerical example. We also provide an interactive Web page for numerical experiments.