This supply chain management study focuses on the substantial economies of scale in transportation. More effective use of transportation resources in the supply chain can result in lower total cost, per load dispatched or per hundredweight. These occur when merchandise is shipped in a companys's own truck (private carriage) or when transportation is performed by a public, for-hire trucking company (common carriage). As a result, better inventory replenishment between successive echelons may have less impact than improved transportation decisions. This is especially true when the latter includes a strategy for shipment consolidation, the policies whereby several small orders will be held as they accumulate, then dispatched as a single, combined load. In this study, renewal theory is applied to two strategies commonly used in practice. For the case of a quantity policy, in which arriving orders are accumulated until at least an aggregate amount of freight can be shipped, the optimal target weight before dispatch is obtained. For a time policy where a load is sent at regular time periods, the optimal length of each consolidation cycle (maximum holding time for any order) is calculated. These strategies are analyzed for both private carriage and common carriage. Graphic and numerical examples for each strategy and for each carriage choice are provided.


  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00961817
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 12 2003 12:00AM