Coordinated inventory replenishment and outsourced transportation operations
TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW, vol.70, pp.400-415, 2014 (SCI-Expanded, SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 70
- Publication Date: 2014
- Doi Number: 10.1016/j.tre.2014.08.004
- Journal Name: TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW
- Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus
- Page Numbers: pp.400-415
- Keywords: Third party logistics, Inventory, Transportation, Coordinated logistics, INTEGRATED INVENTORY, LOGISTICS, STRATEGIES, POLICIES, IMPACT, TIME
- Open Archive Collection: AVESIS Open Access Collection
- TED University Affiliated: Yes
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. (C) 2014 Elsevier Ltd. All rights reserved.