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This research study is an effort to shed light on how transshipment may help improve the management of inventory in a disaster relief system. System dynamics simulation was used to compare inventory control and costs in a humanitarian supply chain without transshipment vs. one with transshipment. A framework for this approach is given along with the results of simulations on a system consisting of two warehouses where transshipment is allowed compared to the alternative where transshipment is not allowed. The preliminary results of this study indicate that transshipment can reduce costs and improve service to disaster victims based on inventory levels maintained in the warehouses. In some cases, transshipment may be more expensive, but this assumes the cost of replenishing inventory as a result of emergency purchase costs.
