Positioning Inventory in Distribution Systems
International Journal of Production Economics,
This article reports on a carefully controlled simulation experiment to determine whether the inventories in a distribution system should be positioned at a warehouse or a retail store closer to the customer. For companies that must fill customer demand from inventory, the results indicate that locating the inventory close to the customer is the best choice. The results also suggest that many of the anomalies in the previous research on this problem might be explained by the lack of control of the frequency of shipments.