supply chain; lateral transshipment; service level
Issue Date
2007-03
Publisher
ELSEVIER SCIENCE BV
Citation
INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, v. 106, No. 1, Page. 115-126
Abstract
A new lateral transshipment policy, called service level adjustment (SLA), is proposed. SLA differs from previous policies by integrating emergency lateral transshipment with preventive lateral transshipment to efficiently respond to customer demands. Additionally, the proposed policy considers the service level to decide the quantity for lateral transshipment. Experiments simulating a two-echelon supply chain were conducted. The proposed policy has lower total costs than previous transshipment policies. Moreover, our policy more effectively responds to changes in demands, penalty cost. and ordering cost. (c) 2006 Published by Elsevier B.V.