Abstract:

The management of multi-echelon with transshipments is an effective approach to improve support effectiveness and provides a new opportunity to better manage inventory. Focusing on the problem, a multi-location inventory system based on steady-state probability with lateral transshipments is provided, and the heuristic algorithm is used to solve and optimize the model. Simulation shows that the proposed model produces accurate estimates. Considering relative important time and cost parameters, the model is further expanded. After introducing a cost structure, the transshipments cost model shows that the proposed strategy can indicate the model’s correctness and the algorithm’s rationality. The result can not only satisfy the support target but also save a large amount of inventory cost, which has a large significance for completing inventory theory and supplying decision assistance for a reasonable optimization project.