Nyong Bassey, Unanaowo and Chiabom Zelibe, Samuel ORCID: https://orcid.org/0000-0002-8722-4343 (2022) Two-echelon inventory location model with response time requirement and lateral transshipment. Heliyon, 8 (8):e10353. ISSN 2405-8440 (Online) (doi:10.1016/j.heliyon.2022.e10353)

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Abstract

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.

Item Type:	Article
Uncontrolled Keywords:	inventory-location, response time, inventory control, base-stock policy, supply chain
Subjects:	Q Science > Q Science (General) Q Science > QA Mathematics
Faculty / School / Research Centre / Research Group:	Faculty of Engineering & Science Faculty of Engineering & Science > School of Computing & Mathematical Sciences (CMS)
Last Modified:	24 Nov 2025 10:29
URI:	https://gala.gre.ac.uk/id/eprint/49656

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