Inbound replenishment and outbound dispatch decisions under hybrid shipment consolidation policies: An analytical model and comparison

The authors investigate operational decisions in a distribution warehouse facing stochastic demand and incurring fixed and linear transportation costs for the inbound inventory replenishment and outbound dispatch decisions. In order to realize scale economies associated with transportation both on the outbound and inbound sides, dispatch schedules and replenishment decisions at the warehouse must be synchronized over time. Immediate delivery policies on the outbound side are not financially viable because outbound dispatch operations will benefit from temporal shipment consolidation. Their focus in this setting is the analytical modeling of hybrid shipment consolidation policies and their comparison to the time-based and quantity-based counterparts. To this end, they propose analytical (exact and approximate) methods to compute and compare the cost under hybrid policies relative to its alternatives. Since shipment consolidation impacts customer waiting and inventory holding, they also investigate the average delay per order and average inventory per time unit as two important metrics of the distribution operation’s performance, along with the annual cost. They compare these metrics among the alternative under hybrid, time-based, and quantity-based policies. The comparison then allows us to offer an explicit analytical comparison of long-run average cost under these three policies without needing to solve the corresponding optimization problems. Notably, their results offer an analytical characterization of relative cost performance (vis-a-vis the numerical comparison available in the literature) and demonstrate the implications of alternative shipment consolidation policies regardless of the values of model parameters. The results are of practical value in the context of the design and operation of an integrated framework for inventory-transportation systems.

• Record URL:
  • https://doi.org/10.1016/j.tre.2023.103135
• Record URL:
  • http://www.sciencedirect.com/science/article/pii/S1366554523001230
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/13665545
• Supplemental Notes:
  • © 2023 The Author(s). Published by Elsevier Ltd. Abstract reprinted with permission of Elsevier.
• Authors:
  • Wei, Bo
  • Çetinkaya, Sıla
  • 0000-0001-6832-4499
  • Cline, Daren B H
• Publication Date: 2023-7

Language

• English

Media Info

• Media Type: Web
• Features: Appendices; References; Tables;
• Pagination: 103135
• Serial:
  • Transportation Research Part E: Logistics and Transportation Review
  • Volume: 175
  • Issue Number: 0
  • Publisher: Elsevier
  • ISSN: 1366-5545
  • Serial URL: http://www.sciencedirect.com/science/journal/13665545

Subject/Index Terms

• TRT Terms: Business practices; Distribution support businesses; Shipments; Supply chain management; Unit costs
• Subject Areas: Administration and Management; Finance; Freight Transportation; Planning and Forecasting;

Filing Info

• Accession Number: 01884432
• Record Type: Publication
• Files: TRIS
• Created Date: Jun 1 2023 9:34AM