An effective lateral transshipment policy to improve service level in the supply chain

An effective lateral transshipment policy to improve service level in the supply chain

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Article ID: iaor20072884
Country: Netherlands
Volume: 1106
Issue: 1
Start Page Number: 115
End Page Number: 126
Publication Date: Jan 2007
Journal: International Journal of Production Economics
Authors: , ,
Keywords: transshipment
Abstract:

A new lateral transshipment policy, called service level adjustment (SLA), is proposed. SLA differs from previous policies by integrating emergency lateral transshipment with preventive lateral transshipment to efficiently respond to customer demands. Additionally, the proposed policy considers the service level to decide the quantity for lateral transshipment. Experiments simulating a two-echelon supply chain were conducted. The proposed policy has lower total costs than previous transshipment policies. Morever, our policy more effectively responds to changes in demands, penalty cost and ordering costs.

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