Article ID: | iaor19991351 |
Country: | United Kingdom |
Volume: | 34E |
Issue: | 2 |
Start Page Number: | 149 |
End Page Number: | 160 |
Publication Date: | Jun 1998 |
Journal: | Transportation Research. Part E, Logistics and Transportation Review |
Authors: | Needham Paul M., Evers Philip T. |
Keywords: | inventory |
Emergency transshipments represent one way in which logistics managers can reduce inventories while simultaneously maintaining customer service levels. This paper examines the cost implications of these actions and offers a straightforward approach to analyzing their suitability. Simulation results indicate that the cost of a stockout is the primary determinant in the transshipment decision, with higher stockout cost levels generally increasing the likelihood that transshipment usage will lead to lower overall cost. A meta-model is proposed as a practical means of providing insight into when emergency transshipments should be employed.