Abstract
Considering the supply chain consists of one supplier and two retailers, we construct the system’s dynamic models which face stochastic demand in the case of non-lateral transshipment (NLT), unidirectional lateral transshipment (ULT) and bidirectional lateral transshipment (BLT). Numerical example simulation experiments of these models were run on Venple. We adopt customer demand satisfaction rate and total inventory as performance indicators of supply chain. Through the comparative of the simulation results with the NLT policy, we analyze the influence of ULT policy and BLT policy on system performance. It shows that, if retailers face the same random distribution demand, lateral transshipment policy can effectively improve the performance of supply chain system; if the retailers face different random distribution demand, lateral transshipment policy cannot effectively improve the performance of supply chain systems, even reduce system’s customer demand satisfaction rate, and increase system inventory variation.
Highlights
Lateral transshipment, an important inventory replenishment policy, has gained a common concern of the academics and business managers in recent years
Considering the supply chain consists of one supplier and two retailers, we construct the system’s dynamic models which face stochastic demand in the case of non-lateral transshipment (NLT), unidirectional lateral transshipment (ULT) and bidirectional lateral transshipment (BLT)
Taking the supply chain system that includes a supplier and two retailers as the research objects, this paper study the influence of lateral transshipments policy on supply chain performance based on system dynamics
Summary
Huo and Li [16] develop batch ordering policy in a single-echelon, multi-location transshipment inventory system [16]. Li et al [17] study inventory management model of the cluster supply chain system with the existence of emergency lateral transshipment [17]. Most of the papers above dealing with transshipment assume that lateral transshipment already exists in system. We consider one supply chain system consists of one supplier and two retailers, allowing a retailer transship from the other one for inventory replenishment besides order from supplier. System’s models were developed by system dynamics assume that all the members use the order-up-to policy, and numerical experiment was run on Venple platform. The paper is organized as follows: in Section 2, the models with lateral transshipment were developed, as well as without lateral transshipment.
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