Abstract
Inventory management is a science that has developed models and methods for decision-making related to the organization of logistics processes in the main functional areas of supply, production, and distribution. The results in a number of papers related to centralized and decentralized inventory allocation are debatable and require further research. Our results indicate that centralization of inventory leads to a reduction in inventory levels, but consideration of additional conditions, such as increased requirements for stock-outs and variations in demand in warehouses, lead to an adjustment in the results. It was found that approaches using the Square Root Law (SRL) to estimate inventory levels assume that the locations face the same average lead time. The proposed approach takes into account the possibility of a combined inventory management strategy that integrates the benefits of placing stock in different warehouses and allows for outcomes such as, on the one hand, the avoidance of shortages in the distribution network and, on the other hand, avoidance of unnecessary safety stocks in warehouses. The proposed approach has been tested on the basis of demand modelling.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Romero-Silva, R., Leeuw, S.: Learning from the past to shape the future: a comprehensive text mining analysis of OR/MS. Omega 100, 102388 (2021)
Sodhi, M., Tang, C., Willenson, E.: Research opportunities in preparing supply chains of essential goods for future pandemics. Int. J. Prod. Res. (2021). https://doi.org/10.1080/00207543.2021.1884310
Barnes, S., Diaz, M., Arnaboldi, M.: Understanding panic buying during COVID-19: a text analytics approach. Expert Syst. Appl. 169, 114360 (2021)
Jackson, I., Tolujevs, J., Kegenbekov, Z.: Review of inventory control models: a classification based on methods of obtaining optimal control parameters. Transp. Telecommun. 21(3), 191–202 (2020)
Kiisler, A., Hilmola, O.: Modelling wholesale company’s supply chain using system dynamics. Transp. Telecommun. 21(2), 149–158 (2020)
Oesera, G., Romano, P.: An empirical examination of the assumptions of the Square Root Law for inventory centralisation and decentralisation. Int. J. Prod. Res. 54(8), 2298–2319 (2016)
Fu, D., Ionescu, C., Aghezzaf, E., Keyser, R.: Decentralized and centralized model predictive control to reduce the bullwhip effect in supply chain management. Comput. Ind. Eng. 73, 21–31 (2014)
Li, J., Yi, L., Shi, V., Chen, X.: Supplier encroachment strategy in the presence of retail strategic inventory: centralization or decentralization? Omega 98, 102213 (2021)
Salcedo, C., Hernandez, A., Vilanova, R., Cuartas, J.: Inventory control of supply chains: mitigating the bullwhip effect by centralized and decentralized Internal Model Control approaches. Eur. J. Oper. Res. 224, 261–272 (2013)
Schmitt, A., Sun, S., Snyder, L., Shen, Z.: Centralization versus decentralization: risk pooling, risk diversification, and supply chain disruptions. Omega 52, 201–212 (2015)
Zhang, P., Xu, X., Shi, V., Zhu, J.: Simultaneous inventory competition and transshipment between retailers. Int. J. Prod. Econ. 230, 107781 (2020)
Treiblmaier, H.: Optimal levels of (de)centralization for resilient supply chains. Int. J. Logist. Manag. 29(1), 435–455 (2018)
Spirin, I., Savosina, M.: Potencial logisticheskoj integracii: Statisticheskaya ocenka vozmozhnogo rezul'tata. In: Innovacionnye tekhnologii v logistike i upravlenii cepyami postavok. ACM, Moskva (2015). (in Russian)
Ryzhikov, Y.U.: Logistika, ocheredi i upravlenie zapasami. GUAP, Sankt-Peterburg (2011). (in Russian)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Lukinskiy, V., Lukinskiy, V., Bazhina, D., Nikolaevskiy, N., Averina, E. (2022). A Combined Strategy of Centralized and Decentralized Inventory Allocation. In: Kabashkin, I., Yatskiv, I., Prentkovskis, O. (eds) Reliability and Statistics in Transportation and Communication. RelStat 2021. Lecture Notes in Networks and Systems, vol 410. Springer, Cham. https://doi.org/10.1007/978-3-030-96196-1_24
Download citation
DOI: https://doi.org/10.1007/978-3-030-96196-1_24
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-96195-4
Online ISBN: 978-3-030-96196-1
eBook Packages: Intelligent Technologies and RoboticsIntelligent Technologies and Robotics (R0)