Designing effective proactive transshipments in retail networks

Proactive transshipments are a means to redistribute inventory in a retail network in order to better meet future customer demand. Proactive transshipment is used when, for example, there are convenient times to redistribute inventory in the network or customers require immediate service. Planning proactive transshipments involves deciding when to redistribute inventory, which locations to involve in the transshipments and how much inventory to transship between the locations. This research proposes a model that can be used to plan proactive transshipments in a general setting. A heuristic transshipment policy is proposed that is shown to perform well compared to commonly used policies on a wide range of test problems.