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Consolidation effects: Whether and how inventories should be pooled

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  • Wanke, Peter F.
  • Saliby, Eduardo
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    Abstract

    This paper presents a framework for deciding whether and how inventories should be pooled, using the consolidation effect as a cornerstone tool to measure inventory costs, service levels, and total costs. Based on the random generation of different scenarios, it is indicated the adequacy of inventory centralization, regular transshipments, and independent systems to a given set of demand, lead time, and holding costs characteristics. Sensitivity analyses on mathematical expressions are performed to determine when one alternative is preferable in terms of total costs. Real settings are also presented in light of the framework developed.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

    Volume (Year): 45 (2009)
    Issue (Month): 5 (September)
    Pages: 678-692

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    Handle: RePEc:eee:transe:v:45:y:2009:i:5:p:678-692

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    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description

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    Related research

    Keywords: Consolidation effect Total cost Service level Regular transshipment Inventory centralization Independent system;

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    Cited by:
    1. Wanke, Peter F., 2012. "Product, operation, and demand relationships between manufacturers and retailers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 340-354.

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