Title

A Note on Lateral Transshipment under Point-Process Driven Demand

Document Type

Article

Publication Date

3-2013

Publication Title

Operations Research Letters

DOI

10.1016/j.orl.2012.12.005

Abstract

We analyze lateral transshipment for items whose demand is driven by an arbitrary point process. We find conditions under which lateral transshipment stochastically lowers the cost of a system of demand centers. Our main structural result is that transshipment works best for slow-moving items, such as spare-parts, when the demands are driven by non-homogeneous or homogeneous Poisson processes. We also obtain general results that apply when demand is driven by an arbitrary point process.