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Transshipment and Its Impact on Supply Chain Members’ Performance

Transshipment and Its Impact on Supply Chain Members’ Performance This note extends some of the key results of Dong and Rudi (2004) to general demand distributions. This generalization is achieved in two steps. First, we build on the analysis of Dong and Rudi to demonstrate that an inventory problem with transshipment is equivalent to a newsvendor problem with an adjusted demand. Then, we study the impact of transshipment by comparing the adjusted demand with the original demand. In addition to extending the results in the existing literature, this note presents a novel approach for analyzing the impact of risk pooling. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Science INFORMS

Transshipment and Its Impact on Supply Chain Members’ Performance

Zhang, Jun
Management Science , Volume 51 (10): 6 – Oct 30, 2005
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References (11)

Publisher
INFORMS
Copyright
Copyright © INFORMS
Subject
Research Article
ISSN
0025-1909
eISSN
1526-5501
DOI
10.1287/mnsc.1050.0397
Publisher site
See Article on Publisher Site

Abstract

This note extends some of the key results of Dong and Rudi (2004) to general demand distributions. This generalization is achieved in two steps. First, we build on the analysis of Dong and Rudi to demonstrate that an inventory problem with transshipment is equivalent to a newsvendor problem with an adjusted demand. Then, we study the impact of transshipment by comparing the adjusted demand with the original demand. In addition to extending the results in the existing literature, this note presents a novel approach for analyzing the impact of risk pooling.

Journal

Management Science – INFORMS

Published: Oct 30, 2005

Keywords: Keywords : risk pooling ; transshipment ; stochastic comparison ; convex order

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