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Multi-item dynamic lot-sizing with delayed transportation policy

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  • Sancak, Emre
  • Salman, F. Sibel

Abstract

We optimize ordering and inbound shipment decisions for a manufacturer that sources multiple items from a single supplier. The objective is to satisfy the requirements in the production plan with minimum transportation and inventory holding costs over a multi-period planning horizon. Transportation costs are charged to the manufacturer on a per truck shipment basis. We investigate the option of delaying a less-than-full truckload shipment to the next period, by utilizing the safety stocks as needed. We analyze the impact of delaying shipments on both cost and service levels in stochastic environments through experiments with data from a bus manufacturer. The results indicate that the proposed policy reduces both holding and transportation costs without creating much stock-out risk.

Suggested Citation

  • Sancak, Emre & Salman, F. Sibel, 2011. "Multi-item dynamic lot-sizing with delayed transportation policy," International Journal of Production Economics, Elsevier, vol. 131(2), pages 595-603, June.
    • Handle: RePEc:eee:proeco:v:131:y:2011:i:2:p:595-603
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    2. Martin Grunewald & Thomas Volling & Christoph Müller & Thomas S. Spengler, 2018. "Multi-item single-source ordering with detailed consideration of transportation capacities," Journal of Business Economics, Springer, vol. 88(7), pages 971-1007, September.
    3. Zhang, Zhi-Hai & Jiang, Hai & Pan, Xunzhang, 2012. "A Lagrangian relaxation based approach for the capacitated lot sizing problem in closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 140(1), pages 249-255.
    4. Yuan-Shyi Peter Chiu & Victoria Chiu & Tsu-Ming Yeh & Hua-Yao Wu, 2020. "Incorporating Outsourcing Strategy and Quality Assurance into a Multiproduct Manufacturer–Retailer Coordination Replenishing Decision," Mathematics, MDPI, vol. 8(12), pages 1-19, December.
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    7. Ali, Agha Iqbal & O'Connor, Debra J., 2013. "Using truck-inventory-cost to obtain solutions to multi-period logistics models," International Journal of Production Economics, Elsevier, vol. 143(1), pages 144-150.

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