Quotation Arikan Fichtinger, Emel, Silbermayr, Lena. 2018. Risk pooling via unidirectional inventory transshipments in a decentralized supply chain. International Journal of Production Research. 56 (17), 5593-5610.




We study risk pooling via unidirectional lateral transshipments between two locations under local decision-making. Unidirectional transshipments can be applicable when cost structures and/or capabilities differ between locations, and it is also a common practice in dual channel supply chains with online and offline sales channels. We show that such a system cannot be coordinated only with varying transshipment prices. The transshipment receiver orders more and the transshipment giver orders less than the respective optimal centralised order quantities. In order to remove this discrepancy, we suggest horizontal coordination mechanisms by introducing a leftover subsidy for the location providing the transshipments or a shortage subsidy for the location receiving transshipments as well as a combination of shortage and leftover subsidy. Further, we evaluate the impact of network structure by comparing the equilibrium order quantities and profits under the uni- and bidirectional systems as well as a system without transshipments. Since demand correlation is a critical aspect in risk pooling we provide a detailed numerical study to discuss its impact on our findings.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Journal of Production Research
Citation Index SCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, STRAT-B, WH-B
Language English
Title Risk pooling via unidirectional inventory transshipments in a decentralized supply chain
Volume 56
Number 17
Year 2018
Page from 5593
Page to 5610
Reviewed? Y
DOI http://dx.doi.org/10.1080/00207543.2017.1394586
Open Access Y
Open Access Link https://doi.org/10.1080/00207543.2017.1394586


Arikan Fichtinger, Emel (Details)
Silbermayr, Lena (Details)
Institute for Production Management (Reiner) (Details)
Information Systems and Operations Management DP (Details)
Institute for Production Management IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5300 Economics (Details)
5326 Production research (Details)
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