On the viability of partial inventory pooling

Yigal Gerchak

International Journal of Inventory Research, 2017, vol. 4, issue 1, 44-60

Abstract: When demands are uncertain, complete inventory pooling is known to be a better strategy than no pooling if the trans-shipment cost is low enough; otherwise, pooling is undesirable. But are there situations where pooling some inventories, but not the rest, in a central warehouse, are the best strategy? We show that such is indeed the case for certain demand distributions and cost parameter values. We show it for a symmetric discrete demand scenario, as well as for a symmetric continuous demand scenario.

Keywords: inventory pooling; trans-shipment; partial pooling. (search for similar items in EconPapers)
Date: 2017
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