A Manager's Roadmap Guide for Lateral Trans-Shipment in Supply Chain Inventory Management

Henry C. W. Lau, Dilupa Nakandala, Paul K. Shum

Research output: Book/Research ReportResearch report

Abstract

As competition increases, manufacturers and wholesalers respond by becoming more cost conscious and more responsive to changing market needs. One supply chain strategy conserves a low inventory level, sufficient simply to fulfil immediate orders. However, a low inventory level is accompanied by a higher risk of stock outages potentially creating the situation where a minimum customer service level is breached leading to sales losses and customer dissatisfaction. To manage these potentials, manufacturers and wholesalers can increase the flexibility in their inventory systems by adopting a mix of strategies including emergency lateral trans-shipment (LT) from other warehouses at a higher costand simultaneously backordering from their usual suppliers to match the stochastic demand. Decision Rules that support the required decision making process have practical value for inventory management practitioners.
Original languageEnglish
Place of PublicationPenrith, N.S.W.
PublisherWestern Sydney University
Number of pages16
DOIs
Publication statusPublished - 2016

Keywords

  • business logistics
  • inventory control
  • supply chain management

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