Inventory management of manufacturers with yield uncertainty and lateral transshipment

Arash Ashjaee, Mohammadali Pirayesh and Farzad Dehghanian

International Journal of Industrial and Systems Engineering, 2023, vol. 44, issue 3, 351-368

Abstract: This article deals with the issue of inventory management of one identical product in a manufacturers' network. Manufacturers use lateral transshipments between each other in response to uncertainties in yield and demand to maximise the total profit. The demand of each manufacturer is considered random as a non-identical continuous probability distribution and their corresponding yield follows some possible scenarios. The objective of our model is to determine the optimal production amount and lateral transshipments in order to maximise the total profit considering the proceeds from sale of goods and salvage of remaining product and the cost of production, lateral transshipments, and shortages. The problem is modelled as a nonlinear constrained programming and the optimal solution is obtained by Karush-Kuhn-Tucker approach. Sensitivity analysis of uncertainty parameters based on a numerical example showed that the utility of using lateral transshipment policy increases with increasing the uncertainty in production yield.

Keywords: inventory management; yield uncertainty; lateral transshipment. (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=132261 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijisen:v:44:y:2023:i:3:p:351-368

Access Statistics for this article

More articles in International Journal of Industrial and Systems Engineering from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().