Paper Info
Title
Distribution Planning For Multi-Echelon Networks Considering Multiple Sourcing And Lateral Transshipments
Abstract
Nowadays, due to the increasing complexity of business environment, especially demand uncertainty, supply chain managers need to establish more-effective sourcing and distribution strategies to ensure high customer service and low stock costs. To overcome this challenge multi-echelon network structures and alternative distribution strategies such as lateral transshipments and multiple sourcing should be considered in inventory optimisation models. In this article, we propose a scenario-based modelling approach to solve a two-stage multi-echelon inventory optimisation problem with a non-stationary demand. The model is based on a distribution requirements planning (DRP) approach and minimises the expected total cost that is composed of the fixed allocation, inventory holding, procurement, transportation, and back-ordering costs. Alternative inventory optimisation models, including the lateral transshipment strategy and multiple sourcing, are thus built, and the corresponding stochastic programmes are solved using the sample average approximation method. Through a numerical investigation conducted with several generated instances and an empirical investigation based on the case of a major French retailer's distribution network, we show the substantial benefit of lateral transshipments and multiple sourcing in reducing the expected total costs of the distribution network.
Year
DOI
Venue
2020
10.1080/00207543.2019.1639841
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
Keywords
DocType
Volume
multi-echelon distribution networks, inventory optimisation, stochastic programming, lateral transshipment, multiple sourcing, non-stationary demand, DRP
Journal
58
Issue
ISSN
Citations 
7
0020-7543
0
PageRank 
References 
Authors
0.34
0
4
Name
Order
Citations
PageRank
Mehdi Firoozi100.34
M. Zied Babai211812.17
Walid Klibi31949.89
Yves Ducq412818.38