An optimal stocking policy and pooling method for lateral transshipment

• Main Authors: Culalic, Reuben Virgil E., Jocson, Suzzette M., Maliksi, Charisma P.
• Format: text
• Language: English
• Published: Animo Repository 1998
• Subjects: Hoisting machinery; Hosiery; Shipment of goods; Transportation; Software engineering; Software maintenance; Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7942
• Institution: De La Salle University

The key factor in a distribution system, with one warehouse and several geographically dispersed non-identical bases, is maintaining a constant level of service. A way in providing an effective service is by way of lateral transshipment, sharing of stocks between bases. Hence, determining a pooling method of these bases is important. This would determine which among these bases can resupply the unsatisfied units of a base to ensure that the cost of doing lateral transshipment is lesser to that ordering from the central warehouse. Moreover, in allowing lateral transshipment, the source base should have enough stock allotted both for transshipment and its own demand. Therefore, determining the optimal stocking level of each base will assure replenishment of the required units. This study focuses on a one-warehouse N-base distribution system with lateral transshipments facing a stochastic demand. It considers a two-echelon inventory system that employs periodic review monitoring of inventory. The objective of the mathematical model formulated is to minimize the inventory and transshipment costs subjected to capacity, replenishment and transshipment constraints. The model was validated through a numerical example and was solved through the use of General Algebraic Modeling System (GAMS). The non-linear model was then translated into a software program that solves transshipment problems with less difficulty. Generalizations and relationships among parameters and variables were derived to complete the study.