An optimal policy for a two depot inventory problem with stock transfer

T.W. Archibald, S.A.E. Sassen, L.C. Thomas

Research output: Contribution to journalArticleAcademicpeer-review

106 Citations (Scopus)
12 Downloads (Pure)


Multiple depot inventory systems with stock transfer are used by many companies especially when demand is high relative to storage capacity. The key issues in such systems are how many of each item to hold at each depot and what to do if there is a demand for an item at a depot that has none of that item in stock. This study was motivated by the inventory problem faced by a UK car part retailer that groups its depots into pairs. The company's policy for dealing with a demand at a depot that cannot be satisfied from local stock is to either transfer the item from the other depot in the group or to place an emergency order. The object of this paper is to characterise an optimal policy for this problem and to propose a method of calculating the parameters of such a policy.
Original languageEnglish
Pages (from-to)173-183
JournalManagement Science
Issue number2
Publication statusPublished - 1997


Dive into the research topics of 'An optimal policy for a two depot inventory problem with stock transfer'. Together they form a unique fingerprint.

Cite this