Systems and methods for multi-echelon inventory planning with lateral transshipment

• US 8,515,835 B2
• Filed: 08/30/2010
• Issued: 08/20/2013
• Est. Priority Date: 08/30/2010
• Status: Active Grant

• Current Assignee: SAS Institute Incorporated
• Original Assignee: SAS Institute Incorporated
• Inventors: Wu, Xinmin, Yi, Jinxin
• Primary Examiner(s): Frenel, Vanel
• Application Number:
  US12/871,487
• Publication Number:
  US 20120054076A1
• Time in Patent Office: 1,086 Days
• Field of Search: 705/28, 705/7, 705/8, 705/10, 235/385
• US Class Current: 705/28
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders

Abstract

In accordance with the teachings described herein, systems and methods are provided for optimizing inventory in a multi-echelon inventory distribution network having at least a first echelon and a second echelon. An example method may include the steps of: receiving information identifying an inventory pool that includes at least two inventory locations within the first or second echelons; determining inventory excesses or shortages at inventory locations within the inventory pool; determining an inventory transshipment plan for transferring inventory between two or more of the inventory locations in the inventory pool based at least in part on the inventory excesses or shortages; and determining an inventory replenishment plan for replenishing inventory at one or more inventory locations in the first echelon from one or more primary supply locations in the second echelon, the inventory replenishment plan being based at least in part on the inventory excesses or shortages and accounting for any inventory transfers identified in the inventory transshipment plan.

Claims

1. A method of optimizing inventory among a plurality of inventory locations, comprising:

receiving data associated with a hierarchy comprising a plurality of hierarchically-arranged nodes organized into parent-child relationships, wherein the nodes represent inventory locations, wherein the hierarchy includes a plurality of echelon levels, wherein a parent node is at a higher echelon level than child nodes, and wherein a parent node is a primary inventory supplier for a plurality of child nodes;

receiving an identification of an inventory pool that includes particular child nodes of a particular parent node in the hierarchy, wherein the particular child nodes are located in a same echelon level or at different echelon levels that are indirectly related;

receiving cost data, wherein the cost data includes a cost associated with an under-supply of inventory at a child node, a cost associated with an excess inventory at a child node, and a cost associated with transporting inventory among the particular child nodes in the inventory pool;

determining, using one or more data processors, an optimal inventory amount at the particular child inventory location nodes;

determining, using the one or more data processors, an estimated service amount at the particular child inventory location nodes based on the optimal inventory amounts, wherein inventory location nodes having a surplus service amount are surplus inventory location nodes, and wherein inventory location nodes having a shortage service amount are shortage inventory location nodes;

optimizing, using the one or more data processors, a transshipment plan for the inventory location nodes in the inventory pool, wherein optimizing is based on the surplus inventory location nodes, the shortage inventory location nodes, the cost associated with the under-supply of inventory, the cost associated with excess inventory, and the cost associated with transporting inventory, and wherein the optimizing involves minimizing a cost associated with the inventory pool;

determining, using the one or more data processors, a revised estimated service amount for the particular child inventory location nodes based on the transshipment plan;

determining, using the one or more data processors, an optimal inventory amount at a particular parent inventory location node based on the revised estimated service amounts;

determining, using the one or more data processors, an estimated service amount at the particular parent inventory location node based upon the optimal inventory amount for the particular parent inventory location node; and

optimizing, using the one or more data processors, an additional transshipment plan for a plurality of additional inventory location nodes that include the particular parent inventory location node based on the estimated service amount at the particular parent inventory location node.

2. The method of claim 1, wherein the inventory originates at a primary supply location, and wherein a node representing the primary supply location is not included in the inventory pool.

3. The method of claim 1, further comprising determining the optimal inventory amounts based on demand forecasts, expected delivery delays, inventory review internal, ready rate, or fill rate.

4. The method of claim 1, further comprising determining the revised estimated service amounts based on the transshipment plan and an inventory replenishment plan that provides inventory from a primary supply location.

5. The method of claim 1, wherein determining the estimated service amount further comprises determining an average inventory level for a particular node.

6. The method of claim 1, wherein the inventory pool includes two or more inventory location node in a particular echelon level, and at least one inventory location node in another echelon level.

7. The method of claim 1, wherein inventory is shipped among the inventory location nodes according to the transshipment plan and the additional transshipment plan, wherein the inventory is shipped directly between inventory locations nodes that are at a same echelon level or inventory location nodes that are at different echelon levels that are indirectly related.

8. A computer-implemented system for optimizing inventory among a plurality of inventory locations, comprising:

one or more data processors;

one or more computer-readable storage mediums containing instructions configured to cause the one or more processors to perform operations including;

receiving data associated with a hierarchy comprising a plurality of hierarchically-arranged nodes organized into parent-child relationships, wherein the nodes represent inventory locations, wherein the hierarchy includes a plurality of echelon levels, wherein a parent node is at a higher echelon level than child nodes, and wherein a parent node is a primary inventory supplier for a plurality of child nodes;

receiving an identification of an inventory pool that includes particular child nodes of a particular parent node in the hierarchy, wherein the particular child nodes are located in a same echelon level or at different echelon levels that are indirectly related;

receiving cost data, wherein the cost data includes a cost associated with an under-supply of inventory at a child node, a cost associated with an excess inventory at a child node, and a cost associated with transporting inventory among the particular child nodes in the inventory pool;

determining an optimal inventory amount at the particular child inventory location nodes;

determining an estimated service amount at the particular child inventory location nodes based on the optimal inventory amounts, wherein inventory location nodes having a surplus service amount are surplus inventory location nodes, and wherein inventory location nodes having a shortage service amount are shortage inventory location nodes;

optimizing a transshipment plan for the inventory location nodes in the inventory pool, wherein optimizing is based on the surplus inventory location nodes, the shortage inventory location nodes, the cost associated with the under-supply of inventory, the cost associated with excess inventory, and the cost associated with transporting inventory, and wherein the optimizing involves minimizing a cost associated with the inventory pool;

determining a revised estimated service amount for the particular child inventory location nodes based on the transshipment plan;

determining an optimal inventory amount at a particular parent inventory location node based on the revised estimated service amounts;

determining an estimated service amount at the particular parent inventory location node based upon the optimal inventory amount for the particular parent inventory location node; and

optimizing an additional transshipment plan for a plurality of additional inventory location nodes that include the particular parent inventory location node based on the estimated service amount at the particular parent inventory location node.

9. The system of claim 8, wherein the inventory originates at a primary supply location, and wherein a node representing the primary supply location is not included in the inventory pool.

10. The system of claim 8, wherein the system is configured to determine the optimal inventory amounts based on demand forecasts, expected delivery delays, inventory review internal, ready rate, or fill rate.

11. The system of claim 8, wherein the system is configured to determine the revised estimated service amounts based on the transshipment plan and an inventory replenishment plan that provides inventory from a primary supply location.

12. The system of claim 8, wherein the system is configured to determine the estimated service amount at a particular node via determining an average inventory level at the particular node.

13. The system of claim 8, wherein the inventory pool includes two or more inventory location nodes in a particular echelon level and at least one inventory location node in another echelon level.

14. The system of claim 8, wherein inventory is shipped among the inventory location nodes according to the transshipment plan and the additional transshipment plan, wherein the inventory is shipped directly between inventory locations nodes that are at a same echelon level or inventory location nodes that are at different echelon levels that are indirectly related.

15. A non-transitory computer-program product for optimizing inventory among a plurality of inventory locations, tangibly embodied in a machine-readable non-transitory storage medium, including instructions configured to cause a data processing apparatus to:

receive data associated with a hierarchy comprising a plurality of hierarchically-arranged nodes organized into parent-child relationships, wherein the nodes represent inventory locations, wherein the hierarchy includes a plurality of echelon levels, wherein a parent node is at a higher echelon level than child nodes, and wherein a parent node is a primary inventory supplier for a plurality of child nodes;

receive an identification of an inventory pool that includes particular child nodes of a particular parent node in the hierarchy, wherein the particular child nodes are located in a same echelon level or at different echelon levels that are indirectly related;

receive cost data, wherein the cost data includes a cost associated with an under-supply of inventory at a child node, a cost associated with an excess inventory at a child node, and a cost associated with transporting inventory among the particular child nodes in the inventory pool;

determine an optimal inventory amount at the particular child inventory location nodes;

determine an estimated service amount at the particular child inventory location nodes based on the optimal inventory amounts, wherein inventory location nodes having a surplus service amount are surplus inventory location nodes, and wherein inventory location nodes having a shortage service amount are shortage inventory location nodes;

optimize a transshipment plan for the inventory location nodes in the inventory pool, wherein optimizing is based on the surplus inventory location nodes, the shortage inventory location nodes, the cost associated with the under-supply of inventory, the cost associated with excess inventory, and the cost associated with transporting inventory, and wherein the optimizing involves minimizing a cost associated with the inventory pool;

determine a revised estimated service amount for the particular child inventory location nodes based on the transshipment plan;

determine an optimal inventory amount at a particular parent inventory location node based on the revised estimated service amounts;

determine an estimated service amount at the particular parent inventory location node based upon the optimal inventory amount for the particular parent inventory location node; and

optimize an additional transshipment plan for a plurality of additional inventory location nodes that include the particular parent inventory location node based on the estimated service amount at the particular parent inventory location node.