Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

Joint inventory and transshipment control for perishable products of a two-period lifetime

  • 466 Accesses

  • 3 Citations

Abstract

We analyze the impact of transshipments among retailers on their inventory replenishment decisions when products are perishable. Previous studies have shown that transshipments improve their operational efficiencies through inventory reallocation. However, these studies have not investigated transshipments for perishable products having a limited lifetime. In this paper, we consider a centrally managed firm owning several retail stores, which coordinates their replenishment policies along with the utilization of transshipments for perishable goods of a two-period lifetime. For this, the single-period planning horizon is analyzed, with a general solution approach for the optimal replenishment and transshipment decisions. We further present a designated solution approach for a two-location system as a special case and illustrate numerical examples in order to highlight the potential value of implementing transshipments for perishable products.

This is a preview of subscription content, log in to check access.

References

  1. 1.

    Archibald T (2007) Modelling replenishment and transshipment decisions in periodic review multilocation inventory systems. J Oper Res Soc 58:948–956

  2. 2.

    Chen X, Hao G, Li X, Yiu KF (2012) The impact of demand variability and transshipment on vendor’s distribution policies under vendor managed inventory strategy. Int J Prod Econ 139:42–48

  3. 3.

    Chiou C (2008) Transshipment problems in supply chain systems: review and extensions. In: Kordic V (ed) Supply chain, theory and applications. I-Tech Education and Publishing, Vienna, Austria

  4. 4.

    Chung YT, Erhun F (2012) Designing supply contracts for perishable goods with two periods of shelf life. IIE Trans. doi:10.1080/0740817X.2012.654847

  5. 5.

    Das C (1975) Supply and redistribution rules for two-location inventory systems: one-period analysis. Manage Sci 21:765–776

  6. 6.

    Gregor PJ, Forthofer RN, Kapadia S (1982) An evaluation of inventory and transportation policies of a regional blood distribution system. Eur J Oper Res 10:106–113

  7. 7.

    Karmarkar US, Patel NR (1977) The one-period N-location distribution problem. Nav Res Logist Q 24:559–575

  8. 8.

    Karmarkar US (1987) The multilocation multiperiod inventory problem: bounds and approximations. Manage Sci 33:86–94

  9. 9.

    Leyffer S, Mahajan A (2010) Nonlinear constrained optimization: methods and software. Working Paper ANL/MCS-P1729-0310, Argonne National Laboratory, IL

  10. 10.

    Li Y, Lim A, Rodrigues B (2009) Pricing and inventory control for a perishable product. Manuf Serv Oper Manag 11:538–542

  11. 11.

    Nahmias S, Pierskalla WP (1973) Optimal ordering policies for a product that perishes in two periods subject to stochastic demand. Nav Res Logist Q 20:207–229

  12. 12.

    Narus J, Anderson J (1996) Rethinking distribution—adaptive channels. Harvard Bus Rev 74:112–120

  13. 13.

    Olsson F (2009) Optimal policies for inventory systems with lateral transshipments. Int J Prod Econ 118:175–184

  14. 14.

    Paterson C, Kiesmuller G, Teunter R, Glazebrook K (2011) Inventory models with lateral transshipments: a review. Eur J Oper Res 210(2):125–136

  15. 15.

    Prastacos GP (1984) Blood inventory management: an overview of theory and practice. Manage Sci 30(7):777–800

  16. 16.

    Robinson LW (1990) Optimal and approximate policies in multiperiod, multilocation inventory models with transshipments. Oper Res 38:278–295

  17. 17.

    Tiacci L, Saetta S (2011) A heuristic for balancing the inventory level of different locations through lateral shipments. Int J Prod Econ 131(1):87–95

Download references

Author information

Correspondence to Taesu Cheong.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Cheong, T. Joint inventory and transshipment control for perishable products of a two-period lifetime. Int J Adv Manuf Technol 66, 1327–1341 (2013). https://doi.org/10.1007/s00170-012-4411-x

Download citation

Keywords

  • Perishable inventory control
  • Lateral transshipment