Article ID: | iaor2009879 |
Country: | Netherlands |
Volume: | 54 |
Issue: | 3 |
Start Page Number: | 341 |
End Page Number: | 358 |
Publication Date: | Apr 2008 |
Journal: | Computers & Industrial Engineering |
Authors: | Kutanoglu Erhan |
Keywords: | inventory, service |
Service parts logistics systems are usually characterized by very low random demand, high part cost, and target time-based service levels, all of which lead inventory planners to utilize inventory sharing or ‘emergency lateral transshipments’ across multiple stocking locations. Using a stylized model with one central warehouse and multiple local stocking locations, we seek insights into the behavior of an inventory sharing system with time-based service level considerations. The goal of inventory sharing is to satisfy a demand in case a local facility is out of stock, by meeting the demand with a direct delivery from another location that can provide the service within the time window necessary for the target service level. We adapt an existing model from the literature for such a system.