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A Performance Agreement To Align The Operation Of A Loading Dock And A Fleet

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Author Info
PATRICIO DONOSO () (Escuela de Administración, Pontificia Universidad Católica de Chile)
MARCOS SINGER () (Escuela de Administración, Pontificia Universidad Católica de Chile)
ALAN SCHELLER-WOLF (Graduate School of Industrial Administration, Carnegie Mellon University)

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Abstract

This article examines a company whose distribution operation is carried out by a loading Dock and a Fleet of trucks. For a number of reasons, each department optimizes its operation locally, with no concern for the operational alignment of the overall system. To resolve this problem, a contract is proposed that will provide an incentive for improved operations, particularly at the loading Dock. The contract specifies a payment from the Fleet to the loading Dock calculated on the basis of a reduction in Fleet size made possible by improvements in the Dock operations. This methodology is applied to a mass consumption product distributing company in Santiago, Chile. Significant savings opportunities result, thanks to operational alignment.

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File URL: http://www.abante.cl/files/ABT/Contenidos/Vol-1-N2/2%20Donoso%20et%20al.pdf
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Publisher Info
Article provided by Escuela de Administracion. Pontificia Universidad Católica de Chile. in its journal ABANTE.

Volume (Year): 1 (1998)
Issue (Month): 2 ()
Pages: 167-188
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Handle: RePEc:pch:abante:v:1:y:1998:i:2:p:167-188

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Related research
Keywords: Performance Agreement; Alignment; Fleet; Incentive; Transfer; Chile;

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Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis

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  1. Patricio Donoso, 1998. "En Busca Del Alineamiento Operacional," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 1(1), pages 33-58. [Downloadable!]
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