Impact of inventory sharing on service availability and transportation levels in time-differentiated distribution

Abstract

This paper studies service availability and transportation performance measures considering a service system with two delivery time-window options. The performance measures are examined through a simulation analysis comparing inventory sharing and non-sharing scenarios under a centralised and a decentralised setup of service facilities. The analysis considers varying demand composition in terms of demand percentages of different service time options. Unlike the existing work in this area, the paper takes into account the spatial factor and argues that considering a uniform cost of alternate shipments may not be appropriate. The analysis highlights that there might be instances where introducing inventory sharing does not implicate an inventory-transportation performance trade off.