Abstract
Reuse and recycling of products and materials have been drawing attentions recently. We focus on rental products, which provide a form of product reuse, and considers a firm operating rental business with rental depots scattered around the country.The paper analyzes forms of product transshipment among depots to reduce cost increase service rate. Two forms of transshipment are studied : 1) an area partition method, which does not allow transshipment across boundaries of areas, and 2) a flexible method, which allows transshipment between two depots if they are within the distance of each other. A problem of finding an optimal area partition for the area partition method is formulated as the set-partitioning problem. Analysis reveals that 1) not-trivial cost reduction and service level improvement might be expected through product transshipment among depots, 2) decisions regarding whether to transship or not should not be made only with short-term cost consideration, and the flexible method yields the higher service level than the area partition method, among others.
