Simulation-based lateral transshipment policy optimization for s, S inventory control problem in a single-echelon supply chain network

Banu Yetkin Ekren; Bartu Arslan

doi:10.11121/ijocta.01.2020.00789

Authors

Banu Yetkin Ekren Yaşar University
Bartu Arslan

DOI:

https://doi.org/10.11121/ijocta.01.2020.00789

Keywords:

inventory, s, S inventory, simulation, lateral-transshipment, 90B05, 90B15, 90B50

Abstract

Since it affects the performance of whole supply chain significantly, definition of correct inventory control policy in a supply chain is critical. Recent technological development enabled real time visibility of a supply network by horizontal integration of each node in a supply network. By this opportunity, inventory sharing among stocking locations is also possible in the effort of cost minimization in supply chain management. Hence, lateral transshipment gained popularity and studies seeking the best lateral-transshipment policy is still under research. In this study, we aim to compare different lateral-transshipment policies for an s, S inventory control problem for a single-echelon supply chain network system. In this work, we consider a supply network with three stocking locations which may perform lateral transshipment among them when backorder takes place. We develop the simulation models of the systems in ARENA 14.5 commercial software and compare the performance of the policies by minimizing the total cost under a pre-defined fill rate constraint by using an optimization tool, OptQuest, integrated in that software. The results show that lateral transshipment works well compared to the scenario when there is no lateral transshipment policy in the network.

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Author Biographies

Banu Yetkin Ekren, Yaşar University

Banu Y. Ekren is a full professor in the department of Industrial Engineering, at Yasar University, in Izmir, Turkey. She got her Ph.D., from University of Louisville in the Dept. of Industrial Engineering, in Kentucky, USA. Her research focus is on warehousing, stochastic and simulation modelling, supply chains, simulation-based optimization, and design of automated warehousing. Banu Y. Ekren holds associate professor position at her university and teaches simulation, stochastic modelling and facility logistics courses at the undergraduate level. She has several simulation-based journal and book chapter publications.

Bartu Arslan

Bartu Arslan is an industrial engineer, graduated from the Department of Industrial Engineering, at Yasar University in Izmir, Turkey. He worked as a fellow under Dr. Banu Y. Ekren’s supervision for a research project funded by TUBITAK focusing on agent-based simulation modelling of an automated warehousing system. His research interests include applications of simulation-optimization in supply chain, logistics, production, and warehousing. Arslan would like to do academic career in Industrial Engineering specifically focusing on dynamic modelling approaches in simulation.

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