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A deterministic model for the transshipment problem of a fast fashion retailer under capacity constraints
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Naderi, Siamak, Kilic, Kemal and Dasci, Abdullah (2020) A deterministic model for the transshipment problem of a fast fashion retailer under capacity constraints. International Journal of Production Economics, 227 . 107687. doi:10.1016/j.ijpe.2020.107687 ISSN 0925-5273.
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Official URL: http://dx.doi.org/10.1016/j.ijpe.2020.107687
Abstract
In this paper we present a novel transshipment problem for a large apparel retailer that operates an extensive retail network. Our problem is inspired by the logistics operations of a very large fast fashion retailer in Turkey, LC Waikiki, with over 475 retail branches and thousands of products. The purpose of transshipments is to rebalance stocks across the retail network to better match supply with demand. We formulate this problem as a large mixed integer linear program and develop a Lagrangian relaxation with a primal–dual approach to find upper bounds and a simulated annealing based metaheuristic to find promising solutions, both of which have proven to be quite effective. While our metaheuristic does not always produce better solutions than a commercial optimizer, it has consistently produced solutions with optimality gaps lower than 7% while the commercial optimizer may produce very poor solutions with optimality gaps as high as almost 300%. We have also conducted a set of numerical experiments to uncover implications of various operational practices of LC Waikiki on its system’s performance and important managerial insights.
| Item Type: | Journal Article | ||||||||
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| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
| Journal or Publication Title: | International Journal of Production Economics | ||||||||
| Publisher: | Elsevier | ||||||||
| ISSN: | 0925-5273 | ||||||||
| Official Date: | September 2020 | ||||||||
| Dates: |
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| Volume: | 227 | ||||||||
| Article Number: | 107687 | ||||||||
| DOI: | 10.1016/j.ijpe.2020.107687 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access |
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