Coordinated Logistics: Joint Replenishment with Capacitated Transportation for a Supply Chain

Abstract

In this study, we consider the integrated inventory replenishment and transportation operations in a supply chain where the orders placed by the downstream retailer are dispatched by the upstream warehouse via an in‐house fleet of limited size. We first consider the single‐item single‐echelon case where the retailer operates with a quantity based replenishment policy, (r,Q), and the warehouse is an ample supplier. We model the transportation operations as a queueing system and derive the operating characteristics of the system in exact terms. We extend this basic model to a two‐echelon supply chain where the warehouse employs a base‐stock policy. The departure process of the warehouse is characterized in distribution, which is then approximated by an Erlang arrival process by matching the first two moments for the analysis of the transportation queueing system. The operating characteristics and the expected cost rate are derived. An extension of this system to multiple retailers is also discussed. Numerical results are presented to illustrate the performance and the sensitivity of the models and the value of coordinating inventory and transportation operations.

A coordinated location-inventory problem in closed-loop supply chain

“…According to Silver et al (1998), "the coordination afforded by a periodic review system can provide significant savings". Several other studies in the literature have noted the value of coordinating various aspects of the supply chain (Thomas and Griffin, 1996;Büyükkaramikli et al, 2014;Kaya et al, 2013;Guide Jr and Van Wassenhove, 2009).…”

Supply Chain Joint Inventory Management and Cost Optimization Based on Ant Colony Algorithm and Fuzzy Model

“…This method embodies the idea that by strengthening inventory control under supply chain management, the system and integration of supply chain can be improved, the agility and responsiveness of enterprises can be enhanced. Because each node enterprise in the supply chain only makes production and supply decisions based on the demand information from its adjacent downstream enterprises, the untruthfulness of demand information will go up along the supply chain upstream, resulting in the phenomenon of step-by-step amplification [20,21]. Because of this demand amplification effect, upstream suppliers tend to maintain higher inventory levels than downstream suppliers.…”

Economies of Product Diversity in Collaborative Logistics

“…Reducing the freight logistics cost, in particular the truck transportation cost, is a topic of interest for many supply chain researchers, as this cost accounts for a significant proportion of the total cost for most, if not all, firms that produce and/or distribute tangible goods (shippers) (e.g., Büyükkaramikli et al. ). One method of reducing the costs of truck transportation, especially in the truckload (TL) segment (the largest segment of the trucking industry), is the use of a technique called collaborative logistics (Gonzalez‐Feliu et al.…”