Alternative Inventory and Distribution Policies of a Food Manufacturer

Abstract

Alternative distribution strategies for delivering to a retailer's regional depots are compared. These include supplying all the manufacturer's warehouses from the factory and allowing every possible lateral transshipment with partial stock rebalancing over different time periods. The principal alternative is to have a hierarchical system. Effects of making emergency transfers to deliberately delayed delivery vehicles are evaluated. A data stream of actual demands for a typical product is used and forecasts are made over different time periods for production planning, warehouse allocations and transshipments. The conclusions are examined for various production frequencies and levels of stock cover.