Effects of Lateral Transshipments in Multi-Echelon Closed-Loop Supply Chains

Spare part supply for machines is realized with multi-echelon closed-loop supply chains, in which spare parts are repaired and led back to stock after removal from a broken machine. Spare parts have to be provided fast for avoiding revenue loss due to Poisson distributed part failures. This requires distribution warehouses, which are located close to the machines and one central warehouse, replenishing the distribution warehouses. If a spare part is requested, the part is supplied by the central warehouse or the distribution warehouse assigned to the requesting location. Emergency transshipments from distribution warehouses that are not assigned to the requesting location, can improve supply chain performance.

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