  In this paper we present a novel transshipment problem for a large apparel
retailer that operates an extensive retail network. Our problem is inspired by
the logistics operations of a very large fast fashion retailer in Turkey, LC
Waikiki, with over 450 retail branches and thousands of products. The purpose
of transshipments is to rebalance stocks across the retail network to better
match supply with demand. We formulate this problem as a large mixed integer
linear program and develop a Lagrangian relaxation with a primal-dual approach
to find upper bounds and a simulated annealing based metaheuristic to find
promising solutions, both of which have proven to be quite effective. While our
metaheuristic does not always produce better solutions than a commercial
optimizer, it has consistently produced solutions with optimality gaps lower
than 7% while the commercial optimizer may produce very poor solutions with
optimality gaps as high as almost 300%. We have also conducted a set of
numerical experiments to uncover implications of various operational practices
of LC Waikiki on its system's performance and important managerial insights.
