The influence of individual cost factors on the use of emergency transshipments

The influence of individual cost factors on the use of emergency transshipments

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Article ID: iaor19991351
Country: United Kingdom
Volume: 34E
Issue: 2
Start Page Number: 149
End Page Number: 160
Publication Date: Jun 1998
Journal: Transportation Research. Part E, Logistics and Transportation Review
Authors: ,
Keywords: inventory
Abstract:

Emergency transshipments represent one way in which logistics managers can reduce inventories while simultaneously maintaining customer service levels. This paper examines the cost implications of these actions and offers a straightforward approach to analyzing their suitability. Simulation results indicate that the cost of a stockout is the primary determinant in the transshipment decision, with higher stockout cost levels generally increasing the likelihood that transshipment usage will lead to lower overall cost. A meta-model is proposed as a practical means of providing insight into when emergency transshipments should be employed.

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