T author considers a model of a decentralized distribution system consisting of n retailers selling an identical product. Retailers face a stochastic demand and must order their initial inventory before this demand is realized. After demand realization, retailers decide how much of their unsold inventory or unsatisfied demand they want to share with other retailers. This is followed by a transs...

Effective supply chain management (SCM) is currently recognized as a key determinant of competitiveness and success for most manufacturing and retailing organizations, because the implementation of supply chain management has significant impact on cost, service level, and quality. Numerous strategies for archiving these targets have been proposed and investigated in both practice and academic o...

In the retail industry, stockouts have a significant effect on a firm's profitability. When a stockout takes place, retailers often apply one of two strategies to resolve the issue – placing an emergency order with their supplier or arranging a lateral transshipment with a nearby partner store. Choosing the optimal response to a stockout is complicated by customers' spontaneous reactions. Custo...

Due to occurrence of unexpected disruptions,a resilient supply chain design is important. In this paper, a bi-objective model is proposed for designing a resilient supply chain including suppliers, distribution centers (DCs), and retailers under disruption risks.The first objective function minimizes total costs. The second objective function maximizes satisfied demands. We use the augmented e-...

We consider the inventory transshipment problem between two retailers that sell the same product to two independent markets. One assumption that distinguishes our work is that unsatisfied customers may also switch to the retailer with surplus inventory. We examine the impact of such customer switching behavior on firms' inventory decisions and profits. We identify situations when the firm with ...

W e study a firm’s optimal transshipment problem considering the impacts of setup costs for transshipment and demand distribution shapes. We assume that the demand follows a three-point distribution, which changes from a degenerate distribution, to a unimodal distribution, and to a bimodal distribution as the demand shape parameter increases. We find that as the demand shape parameter increases...

We consider a supply chain, which consists of several retailers and one supplier. The retailers, who possibly differ in their cost and demand parameters, may be coordinated through replenishment strategies and transshipments, that is, movement of a product among the locations at the same echelon level. We prove that in order to minimize the expected long-run average cost for this system, an opt...

We present and study a three-stage model of a decentralized distribution system consisting of n retailers, each of whom faces a stochastic demand for an identical product. In the first stage, before the demand is realized, each retailer independently orders her initial inventory. In the second stage, after the demand is realized, each retailer decides how much of her residual supply/demand she ...

In order to study retailers’ ordering behavior deviating from the standard theoretical optimal decision, which is caused by information asymmetry, cognitive ability, insufficient computing and other factors, we construct a bounded-rationality choice model with quantal response equilibrium. First, existence uniqueness of equilibrium transshipment game have been proved price satisfying certain co...