We analyzed the effect of inventory pooling on the system where multiple depot was used to replenish retailers and where inventories are kept only on the depots. Inventory pooling consists of inventory integration and inventory exchange. We used simulation for checking the cost saving effect of reducing the number of depot (Inventory Integration) for the case when inventories kept on every depots are commonly used for all retailers when certain depot have stockَout for their retailer assigned to them (Inventory Exchange) with the constraint of service level. Simulation on wide range of parameter settings results show that cost saving effect from inventory integration diminishes when transportation cost between depot and retailers or stockَout cost, or retailer number increases. The effect becomes stronger when the demands on retailers have bigger variance or average. Also the results show that the cost saving effect from inventory exchange becomes stronger on the same situation when inventory integration effect becomes stronger.

• 정재헌(부경대학교 경영학부) | Jaeheon Jungٜ Corresponding Author