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A Two-Item Two-Warehouse Periodic Review Inventory Model With Transshipment, Koushik S. Ramakrishna, Sharafali Moosa, Yun Fong Lim

Research Collection Lee Kong Chian School Of Business

We study a two-item two-warehouse periodic review inventory model that allows transshipment between warehouses and emergency orders. The model helps to determine two decisions: (i) the order up to levels for the two items at the two warehouses, and (ii) whether to accept a transshipment request from the other warehouse. The acceptance of a transshipment request in a warehouse depends on the time until the next review epoch and the inventory level of the warehouse. We propose a search procedure, which is a combination of greedy heuristics and a Lagrangian relaxation method, to minimize the total operating cost of the …