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Multi-level inventory management decisions with transportation cost consideration

Author

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  • Madadi, Alireza
  • Kurz, Mary E.
  • Ashayeri, Jalal

Abstract

In this article we address specific inventory management decisions with transportation cost consideration in a multi-level environment consisting of a supplier-warehouse-retailers. We develop two models - namely, decentralized ordering model and centralized ordering model to investigate the effect of collective ordering by retailers on the total inventory cost of the system. A numerical study shows that the proposed model is robust and generates reasonable cost savings. The models have potential in several multi-level applications such as fresh or frozen food delivery to stores of different supermarkets or the supply of medicine to a number of hospitals from a wholesaler.

Suggested Citation

  • Madadi, Alireza & Kurz, Mary E. & Ashayeri, Jalal, 2010. "Multi-level inventory management decisions with transportation cost consideration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(5), pages 719-734, September.
    • Handle: RePEc:eee:transe:v:46:y:2010:i:5:p:719-734
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    Citations

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    Cited by:

    1. Gürler, Ülkü & Alp, Osman & Büyükkaramikli, Nasuh Çağdaş, 2014. "Coordinated inventory replenishment and outsourced transportation operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 400-415.
    2. Raden Achmad Chairdino Leuveano & Mohd Nizam Ab Rahman & Wan Mohd Faizal Wan Mahmood & Chairul Saleh, 2019. "Integrated Vendor–Buyer Lot-Sizing Model with Transportation and Quality Improvement Consideration under Just-in-Time Problem," Mathematics, MDPI, vol. 7(10), pages 1-25, October.
    3. Rahimi, Mohammad & Baboli, Armand & Rekik, Yacine, 2017. "Multi-objective inventory routing problem: A stochastic model to consider profit, service level and green criteria," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 59-83.
    4. Jean Respen & Nicolas Zufferey & Philippe Wieser, 2017. "Three-level inventory deployment for a luxury watch company facing various perturbations," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(10), pages 1195-1210, October.
    5. Van der Heide, G. & Buijs, P. & Roodbergen, K.J. & Vis, I.F.A., 2018. "Dynamic shipments of inventories in shared warehouse and transportation networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 240-257.
    6. Sarkar, Biswajit & Ganguly, Baishakhi & Sarkar, Mitali & Pareek, Sarla, 2016. "Effect of variable transportation and carbon emission in a three-echelon supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 112-128.
    7. Sternbeck, Michael G. & Kuhn, Heinrich, 2014. "An integrative approach to determine store delivery patterns in grocery retailing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 205-224.
    8. 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.
    9. Tempelmeier, Horst & Bantel, Oliver, 2015. "Integrated optimization of safety stock and transportation capacity," European Journal of Operational Research, Elsevier, vol. 247(1), pages 101-112.

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