Template-Type: ReDIF-Paper 1.0
Author-Name: Gong, Y.
Author-Name-Last: Gong
Author-Name-First: Yeming
Author-Name: Yucesan, E.
Author-Name-Last: Yucesan
Title: The Multi-Location Transshipment Problem with Positive Replenishment Lead Times
Abstract: Transshipments, monitored movements of material at the same echelon of a supply chain, represent an effective pooling mechanism.  With a single exception, research on transshipments overlooks replenishment lead times. The only approach for two-location inventory systems with non-negligible lead times could not be generalized to a multi-location setting, and the proposed heuristic method cannot guarantee to provide optimal solutions. This paper uses simulation optimization by combining an LP/network flow formulation with infinitesimal perturbation analysis to examine the multi-location transshipment problem with positive replenishment lead times, and demonstrates the computation of the optimal base stock quantities through sample path optimization. From a methodological perspective, this paper deploys an elegant duality-based gradient computation method to improve computational efficiency. In test problems, our algorithm was also able to achieve better objective values than an existing algorithm.
Creation-Date: 2006-09-07
File-URL: https://repub.eur.nl/pub/7947/ERS-2006-048-LIS.pdf
File-Format: application/pdf
Series: RePEc:ems:eureri
Number: ERS-2006-048-LIS
Classification-JEL: C61, M, M11, R4, R41
Keywords: Infinitesimal Perturbation Analysis (IPA), Simulation Optimization, Transshipment
Handle: RePEc:ems:eureri:7947