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Dynamic shipments of inventories in shared warehouse and transportation networks

G. Van der Heide, P. Buijs, K.J. Roodbergen and I.F.A. Vis

Transportation Research Part E: Logistics and Transportation Review, 2018, vol. 118, issue C, 240-257

Abstract: In shared warehouse and transportation networks, dynamic shipments of inventories are carried out based on up-to-date inventory information. This paper studies the effect of network structures on optimal decision-making. We propose a discrete time modeling framework with stochastic demand, capturing a wide variety of network structures. Using Markov decision processes, we obtain optimal order and dynamic shipment decisions for small networks. We compare optimal solutions of different four-node network structures. Results indicate product characteristics significantly influence the effectiveness of network structures. Surprisingly, two-echelon networks are occasionally costlier than any other network. Moreover, dynamic shipments yield considerable gains over static shipments.

Keywords: Shared warehouse and transportation network; Dynamic shipments; Network comparisons; Inventory; Markov decision process (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:transe:v:118:y:2018:i:c:p:240-257