Impacts of inventory shortage policies on transportation requirements in two-stage distribution systems

Impacts of inventory shortage policies on transportation requirements in two-stage distribution systems

0.00 Avg rating0 Votes
Article ID: iaor20013733
Country: Netherlands
Volume: 129
Issue: 2
Start Page Number: 299
End Page Number: 310
Publication Date: Mar 2001
Journal: European Journal of Operational Research
Authors: ,
Keywords: inventory: order policies
Abstract:

This paper investigates the impacts inventory shortage policies have on transportation costs in base-stock distribution systems under uncertain demand. The model proposed demonstrates how backlogging arrangements can serve to decrease the variability of transportation capacity requirements, and hence the magnitude of transportation costs, when compared with policies that expedite demand shortages. The model shows how inventory policy decisions directly impact expected transportation costs and provides a new method for setting stock levels that jointly minimizes inventory and transportation costs. The model and solution method provide insights into the relationship between inventory decisions and transportation costs and can serve to support delivery policy negotiations between a supplier and customer that must choose between expediting and backlogging demand shortages.

Reviews

Required fields are marked *. Your email address will not be published.