The variability of supply chain parameters and their influence on distribution network with the use of “Emergency Lateral Transshipment”

This paper tackles the issue of the emergency transshipment inventory management in a multi-echelon, multi-location distribution system. The inventory control policies at the warehouse is the (R, s´, Q´) periodic review and at the retailers is the (s, Q) continuous review. The objective is to determine the policy parameters (s, Q) and (s´, Q´) which minimize the total cost subject to a desired service level. The determination of these parameters is carried out by a method based on simulation-optimization by using the software “Oracle Crystal Ball”. This experimental study allows us to examine the effect of the input parameters on performance measures and transshipment benefits.