Inventory models with lateral transshipments: A review

Lateral transshipments within an inventory system are stock movements between locations of the same echelon. These transshipments can be conducted periodically at predetermined points in time to proactively redistribute stock, or they can be used reactively as a method of meeting demand which cannot be satisfied from stock on hand. The elements of an inventory system considered, e.g. size, cost structures and service level definition, all influence the best method of transshipping. Models of many different systems have been considered. This paper provides a literature review which categorizes the research to date on lateral transshipments, so that these differences can be understood and gaps within the literature can be identified.