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An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition

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An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition. / Archibald, T W; Black, D; Glazebrook, K D.
In: European Journal of Operational Research, Vol. 192, 2009, p. 69-78.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Archibald, TW, Black, D & Glazebrook, KD 2009, 'An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition', European Journal of Operational Research, vol. 192, pp. 69-78. https://doi.org/10.1016/j.ejor.2007.09.019

APA

Archibald, T. W., Black, D., & Glazebrook, K. D. (2009). An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition. European Journal of Operational Research, 192, 69-78. https://doi.org/10.1016/j.ejor.2007.09.019

Vancouver

Archibald TW, Black D, Glazebrook KD. An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition. European Journal of Operational Research. 2009;192:69-78. doi: 10.1016/j.ejor.2007.09.019

Author

Archibald, T W ; Black, D ; Glazebrook, K D. / An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition. In: European Journal of Operational Research. 2009 ; Vol. 192. pp. 69-78.

Bibtex

@article{29a9a59b8476450c9cd581cdde275709,
title = "An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition",
abstract = "In multi-location inventory systems, transshipments are often used to improve customer service and reduce cost. Determining optimal transshipment policies for such systems involves a complex optimisation problem that is only tractable for systems with few locations. Consequently simple heuristic transshipment policies are often applied in practice. This paper develops an approximate solution method which applies decomposition to reduce a Markov decision process model of a multi-location inventory system into a number of models involving only two locations. The value functions from the subproblems are used to estimate the fair charge for the inventory provided in a transshipment. This estimate of the fair charge is used as the decision criterion in a heuristic transshipment policy for the multi-location system. A numerical study shows that the proposed heuristic can deliver considerable cost savings compared to the simple heuristics often used in practice. (C) 2007 Elsevier B.V. All rights reserved.",
author = "Archibald, {T W} and D Black and Glazebrook, {K D}",
year = "2009",
doi = "10.1016/j.ejor.2007.09.019",
language = "English",
volume = "192",
pages = "69--78",
journal = "European Journal of Operational Research",
issn = "0377-2217",
publisher = "Elsevier Science B.V.",

}

RIS

TY - JOUR

T1 - An index heuristic for transshipment decisions in multi-location inventory systems based on a pairwise decomposition

AU - Archibald, T W

AU - Black, D

AU - Glazebrook, K D

PY - 2009

Y1 - 2009

N2 - In multi-location inventory systems, transshipments are often used to improve customer service and reduce cost. Determining optimal transshipment policies for such systems involves a complex optimisation problem that is only tractable for systems with few locations. Consequently simple heuristic transshipment policies are often applied in practice. This paper develops an approximate solution method which applies decomposition to reduce a Markov decision process model of a multi-location inventory system into a number of models involving only two locations. The value functions from the subproblems are used to estimate the fair charge for the inventory provided in a transshipment. This estimate of the fair charge is used as the decision criterion in a heuristic transshipment policy for the multi-location system. A numerical study shows that the proposed heuristic can deliver considerable cost savings compared to the simple heuristics often used in practice. (C) 2007 Elsevier B.V. All rights reserved.

AB - In multi-location inventory systems, transshipments are often used to improve customer service and reduce cost. Determining optimal transshipment policies for such systems involves a complex optimisation problem that is only tractable for systems with few locations. Consequently simple heuristic transshipment policies are often applied in practice. This paper develops an approximate solution method which applies decomposition to reduce a Markov decision process model of a multi-location inventory system into a number of models involving only two locations. The value functions from the subproblems are used to estimate the fair charge for the inventory provided in a transshipment. This estimate of the fair charge is used as the decision criterion in a heuristic transshipment policy for the multi-location system. A numerical study shows that the proposed heuristic can deliver considerable cost savings compared to the simple heuristics often used in practice. (C) 2007 Elsevier B.V. All rights reserved.

U2 - 10.1016/j.ejor.2007.09.019

DO - 10.1016/j.ejor.2007.09.019

M3 - Journal article

VL - 192

SP - 69

EP - 78

JO - European Journal of Operational Research

JF - European Journal of Operational Research

SN - 0377-2217

ER -