Two-echelon inventory location model with response time requirement and lateral transshipment

Autor: Unanaowo Nyong Bassey, Samuel Chiabom Zelibe
Jazyk: angličtina
Rok vydání: 2022
Předmět:
Zdroj: Heliyon, Vol 8, Iss 8, Pp e10353- (2022)
Druh dokumentu: article
ISSN: 2405-8440
DOI: 10.1016/j.heliyon.2022.e10353
Popis: This study presents a new model for a two-echelon location-inventory system with response time constraints. This system controls inventory with a (S-1, S) policy and comprises of a finite collection of customers, a finite collection of service facilities and a single plant. This paper's main novelty is the incorporation of lateral transshipment into a two-echelon location-inventory system with response time requirement. By using a continuous-time Markov process approach, we determine expected on-hand inventory level in steady state, expected lateral transshipment level in steady state and expected backorder level in steady state. We utilize these steady state levels to formulate a mixed integer nonlinear programming model which incorporates lateral transshipment into an integrated location-inventory system with response time constraint. The model minimizes the total system cost and simultaneously determines: optimal location and number of service facilities, the optimal assignment of customers and base-stock level. We exploit the model's properties using Lagrange decomposition and we show that the model is convex. The model is tested on a real-world scenario using GAMS and our model returned lower costs following comparisons with a model without lateral transshipment. We also establish that lateral transshipment results to consistency of expected cost with varying response time requirement.
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