Multi-period stochastic lateral transshipment problem for rental products Online publication date: Mon, 25-Oct-2021
by Koji Aragane; Tomoki Fukuba; Takayuki Shiina
Asian J. of Management Science and Applications (AJMSA), Vol. 6, No. 1, 2021
Abstract: In this study, we employed a multi-period stochastic programming model to examine the lateral transshipment problem of rental products and verified the effectiveness of this model under several assumptions about demand trends. The design and operation of multi-period supply chain networks is a large-scale optimisation problem under uncertainty. Lateral transshipment between bases is effective in improving service levels and in reducing inventory. In this study, we assume that the quantity of demand and length of rentals follow a probability distribution (since it deals with rental products). We construct a scenario tree to consider the uncertainty of rental products in multi-periods using the K-means method. Considering demand trends, we construct three types of scenario trees that represent flat, growth, and decline trends. We demonstrate the effectiveness of the model for each trend through numerical experimentation.
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