The routed inventory pooling problem with three non-identical retailers

Abstract

We consider a single period inventory problem with three non-identical retailers in which items can be pooled at a predetermined point in time. Since multiple items are often pooled with a single visit to each retailer, we use a predetermined (shortest) route for redistribution. We derive cost expressions for this routed pooling policy as well as for the no pooling and complete pooling policies, which serve as benchmarks. In a numerical investigation we analyze how much of the pooling benefits can be captured if the route for redistribution is fixed. Furthermore, we investigate how stock is distributed among retailers at the beginning of the period and we look into the influence of a retailer׳s size and position in the route on expected costs.