Abstract

http://ssrn.com/abstract=1113956
 
 

References (42)



 
 

Citations (1)



 


 



Inventory Sharing Under Decentralized Preventive Transshipments


Ying Rong


Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

Lawrence V. Snyder


Lehigh University - Department of Industrial and Systems Engineering

Yang Sun


California State University, Sacramento - College of Business Administration

March 27, 2008

Rong, Y., L. V. Snyder, and Y. Sun, 2010. Inventory Sharing under Decentralized Preventive Transshipments, Naval Research Logistics, 57(6), 540-562

Abstract:     
We consider preventive transshipments between two stores in a decentralized system with two demand subperiods. Replenishment orders are made before the first subperiod, and the stores may make transshipments to one another between the subperiods. We prove that the transshipment decision has a dominant strategy, called a control-band conserving transfer policy, under which each store chooses a quantity to transship in or out that will keep its second-subperiod starting inventory level within a range called a control band. We prove that the optimal replenishment policy is a modified base-stock policy in which the order-up-to level depends on the initial inventory and capacity level at the other store. Finally, we prove that there does not exist a transfer price that coordinates the decentralized supply chain. Our research also explains many of the differences between preventive and lateral transshipments, including differences in the optimal transfer policies and the existence or nonexistence of transfer prices that coordinate the system.

Number of Pages in PDF File: 47

Keywords: preventive transshipment, dominant strategy, iterated strict dominance

Accepted Paper Series


Download This Paper

Date posted: March 28, 2008 ; Last revised: December 30, 2013

Suggested Citation

Rong, Ying and Snyder, Lawrence V. and Sun, Yang, Inventory Sharing Under Decentralized Preventive Transshipments (March 27, 2008). Rong, Y., L. V. Snyder, and Y. Sun, 2010. Inventory Sharing under Decentralized Preventive Transshipments, Naval Research Logistics, 57(6), 540-562. Available at SSRN: http://ssrn.com/abstract=1113956 or http://dx.doi.org/10.2139/ssrn.1113956

Contact Information

Ying Rong (Contact Author)
Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )
No.535 Fahuazhen Road
Shanghai Jiao Tong University
Shanghai, Shanghai 200052
China
Lawrence V. Snyder
Lehigh University - Department of Industrial and Systems Engineering ( email )
Harold S. Mohler Laboratory
200 West Packer Avenue
Bethlehem, PA 18015-1582
United States
Yang Sun
California State University, Sacramento - College of Business Administration ( email )
School of Business Administration
Sacramento, CA 95819-6081
United States
916-278-6001 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 1,078
Downloads: 239
Download Rank: 72,927
References:  42
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.250 seconds