Optimal allocation policy for a multi-location inventory system with a quick response warehouse

A.C.C. Wijk, van; I.J.B.F. Adan; G.J.J.A.N. Houtum, van

doi:10.1016/j.orl.2013.03.002

Optimal allocation policy for a multi-location inventory system with a quick response warehouse

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Abstract

We study a multi-location inventory problem with a so-called quick response warehouse and base stock inventory control. In case of a stock-out at a local warehouse, a demand can be satisfied by a stock transfer from the quick response warehouse. We derive the optimal policy for when to apply such a stock transfer, as well as conditions under which that is always optimal. In a numerical experiment we compare the optimal allocation policy to simpler policies.

Original language	English
Pages (from-to)	305-310
Journal	Operations Research Letters
Volume	41
Issue number	3
DOIs	https://doi.org/10.1016/j.orl.2013.03.002
Publication status	Published - 2013

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title = "Optimal allocation policy for a multi-location inventory system with a quick response warehouse",

abstract = "We study a multi-location inventory problem with a so-called quick response warehouse and base stock inventory control. In case of a stock-out at a local warehouse, a demand can be satisfied by a stock transfer from the quick response warehouse. We derive the optimal policy for when to apply such a stock transfer, as well as conditions under which that is always optimal. In a numerical experiment we compare the optimal allocation policy to simpler policies.",

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AB - We study a multi-location inventory problem with a so-called quick response warehouse and base stock inventory control. In case of a stock-out at a local warehouse, a demand can be satisfied by a stock transfer from the quick response warehouse. We derive the optimal policy for when to apply such a stock transfer, as well as conditions under which that is always optimal. In a numerical experiment we compare the optimal allocation policy to simpler policies.

U2 - 10.1016/j.orl.2013.03.002

DO - 10.1016/j.orl.2013.03.002

M3 - Article

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VL - 41

SP - 305

EP - 310

JO - Operations Research Letters

JF - Operations Research Letters

IS - 3

ER -

Optimal allocation policy for a multi-location inventory system with a quick response warehouse

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