Highlights Coordinated inventory and transportation management of a supply chain is studied. Transportation is outsourced to a third-party logistics company through a contract. Continuous review (Q, S) and periodic review (R, T) policies are compared. Structural properties that aid policy optimization are developed. The settings where a practical periodic policy is also cost efficient are found.

    Abstract We consider a one-warehouse N retailers supply chain with stochastic demand. Inventory is managed in-house whereas transportation is outsourced to a 3PL provider. We develop analytical expressions for the operating characteristics under both periodic and continuous joint replenishment policies. We identify the settings where a periodic review policy is comparable to a continuous review one. In our numerical test-bed, the periodic policy performed best in larger supply chains operating with larger trucks. We also observed that if the excess utilization charge is less than 25%, outsourcing becomes beneficial even if outsourcing cost is 25% more than the in-house fleet costs.


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    Titel :

    Coordinated inventory replenishment and outsourced transportation operations


    Beteiligte:


    Erscheinungsdatum :

    2014-08-13


    Format / Umfang :

    16 pages




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch