An inventory model with returns and lateral transshipments

Ching W-K (), Yuen W-O and A W Loh
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Ching W-K: The University of Hong Kong
Yuen W-O: The University of Hong Kong
A W Loh: The Polytechnic University of Hong Kong, Hung Hom

Journal of the Operational Research Society, 2003, vol. 54, issue 6, 636-641

Abstract: Abstract In this paper, we propose a single-item inventory model with returns. The model allows lateral transshipment of returns from one inventory system to another. Each inventory system is under continuous review and an (r, Q) policy is employed as the inventory control. An approximated closed-form solution of the system steady-state probability distribution is derived when Q is large. The approximated inventory cost and replenishment cost can be written in terms of this distribution. We show that the rejection rate of returns is reduced significantly when transshipment of returns is allowed between the inventory systems.

Keywords: inventory model; returns; lateral transshipment; reverse logistics; steady-state probability distribution (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (7)

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DOI: 10.1057/palgrave.jors.2601521

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