This paper is based on observations that competing retailers have the option of either agreeing in advance to transship excess inventory to each other or seeing unsatisfied customers switch to the competitor for a substitute. A transshipment game and a substitution game between competing retailers is studied. After establishing the existence and uniqueness of a pure-strategy Nash Equilibrium in...

We examine transshipment incentives in a decentralized supply chain where a monopolist distributes a product through independent retailers. A key insight is that the transshipment price determines whether the firms benefit from, or are hurt by, transshipment. In particular, we show that the manufacturer prefers to set the transshipment price as high as possible, while retailers prefer a lower t...

Considering the supply chain consists of one supplier and two retailers, we construct the system’s dynamic models which face stochastic demand in the case of non-lateral transshipment (NLT), unidirectional lateral transshipment (ULT) and bidirectional lateral transshipment (BLT). Numerical example simulation experiments of these models were run on Venple. We adopt customer demand satisfaction r...

This paper studies a distribution system consisting of multiple retail locations with transshipment operations among the retailers. Due to the difficulty in computing the optimal solution imposed by the transshipment operations and in estimating shortage cost from a practical perspective, we propose a robust optimization framework for analyzing the impact of transshipment operations on such a d...

We study a newsvendor game with transshipments, in which n retailers face a stochastic demand for an identical product. Before the demand is realized, each retailer independently orders her initial inventory. After the demand is realized, the retailers select an optimal transshipment pattern and ship residual inventories in order to meet residual demands. Unsold inventories are salvaged at the ...

We consider a supply chain, which consists of N retailers and one supplier. The retailers may be coordinated through replenishment strategies and lateral transshipments, that is, movement of a product among the locations at the same echelon level. Transshipment quantities may be limited, however, due to the physical constraints of the transportation media or due to the reluctance of retailers t...

This article deals with supply chain systems in which lateral transshipments are allowed. For a system with two retailers facing stochastic demand, we relax the assumption of negligible fixed transshipment costs, thus, extending existing results for the single-item case and introducing a new model with multiple items. The goal is to determine optimal transshipment and replenishment policies, su...

The supply chain between manufacturers and retailers always includes transshipments through a network of locations. A major challenge in making demand meet supply has been to coordinate transshipment activities across the chain aimed at reducing costs and increasing service levels in the face of a range of factors, including demand fluctuations, short lead times, warehouse limitations and trans...

Generally, the inventory routing problem occurs in a supply chain where customers consider the supplier responsible for inventory replenishment. In this situation, the supplier finds the answer to questions regarding the time and quantity of delivery to the customer as well as the sequence of customers in the routes. Considering the effect of production decisions on answering these questions, t...