All type of retailers face an uncertainty of consumer demands. The retailer who having long replenishment lead time from the original supplier and located close to each other are coordinated to prevent stock out and increase service level of their customer. This coordination is simply called lateral transshipment which defines the redistribution of stock from retailer with stock on hand to the retailer who is expecting significant loss due to high risk.
If transportation cost is increased, lateral transshipment is known as a better approach than a policy of no transshipment. The execution of lateral transshipment was done by Young Hae Lee at airport to inspect the airplane. However this is difficult in the companies or in department due to the information extinction and insufficient understanding between companies.
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