Optimal policies for stock redistribution in a retail network: Mathematical modeling and algorithmic solution

Abstract

We study the problem of stock replenishment and transshipment in the retail industry. We develop a model that can accommodate different policies, including centralized redistribution (replenishment) and decentralized redistribution (lateral transshipments), allowing for direct comparisons between them. We present a numeric analysis in which the benchmark instances stem from the collaboration with a high-end clothing retail company. The underlying model, as usually in the field, is a large-scale mixed-integer linear programming problem. We develop a specific algorithmic procedure to solve this MILP problem and compare its performance with the direct solution via state-of-the-art solvers.