Séminaire conjoint CRT-Chaire de recherche du Canada en distributique

TITRE: The Multi-location Transshipment Problem with Capacitated Production

CONFÉRENCIER: Deniz Ozdemir, Faculty of Management, McGill University

DATE et ENDROIT: Jeudi 4 novembre, 10h30, salle 5441, Pavillon André-Aisenstadt, Campus de l’Université de Montréal

RESPONSABLE: Gilbert Laporte (343-6143)

RÉSUMÉ: We consider coordination among stocking locations through replenishment strategies that take explicitly into consideration lateral transshipments, transfer of a product among locations at the same echelon level. We incorporate production capacity such that the supplier has limited production in a each period. We model different cases of transshipment capacity as a capacitated network flow problem embedded in a stochastic optimization problem. Under the assumption of instantaneous transshipments, we develop a solution procedure based on infinitesimal perturbation analysis to solve the stochastic optimization problem, where the objective is to find the policy that minimizes the expected total cost of inventory, shortage, and transshipments. In addition, the validity of the sample-path-based optimization procedure for the setting with limited production is proved. Such a numerical approach provides the flexibility to solve complex problems. The impact on system behavior and performance measures of the stocking locations is analyzed when the supplier may fail to satisfy all the replenishment order of locations. To deal with the demand shortfalls due to limited production capacity, an allocation rule is incorporated to the model, as well. However, our study shows that inventory distribution in a production-inventory system is robust with respect to the choice of the allocation rule.