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Title: Managing transshipments in a multi-retailer system with approximate policies
Authors: Çömez, Dolgan Nagihan
Fescioğlu, Ünver Nilgün
Keywords: inventory sharing
decentralized system
heuristic transshipment policy
Braess's paradox
Issue Date: 2015
Publisher: Palgrave Macmillan Ltd
Source: Çömez-Dolgan, N., & Fescioglu-Unver, N. (2015). Managing transshipments in a multi-retailer system with approximate policies. Journal of the Operational Research Society, 66(6), 947-964.
Abstract: Using the right transshipment policy is important when transshipments are exercised under demand uncertainty. Optimal transshipment policy can be quite complex in a multi-firm system as optimal actions depend on all system variables. Moreover, both how to select requested retailer and how to respond to requests are in question. We introduce simple, close-to-optimal heuristic transshipment policies for multiple retailers. We first show that heuristic policies may perform even better than self-optimal policy, which is explained by Braess's paradox. Then we test the performances of various heuristics with respect to centrally optimal policy. When retailers can observe others' inventory levels, more effective transshipments can be made. Otherwise, a random selection performs quite well. We also observe that although always-accept respond policy is quite close to centrally optimal in small systems, the performance of pairwise-optimal holdback levels to respond requests is more clear and consistent for larger systems.
ISSN: 0160-5682
Appears in Collections:Endüstri Mühendisliği Bölümü / Department of Industrial Engineering
Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection
WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection

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