The impact of lead time reliability in freight transport: A logistics assessment of transport economics findings
This paper considers speed and reliability, measured by the average and variance of the lead time, to examine the relevance of the latter variable on inventory costs. By using a flexible simulation framework, it is shown that reducing variability does not necessarily reduce costs and might in fact increase the costs of safety stock, depending on the shape of the demand distribution during lead time and the targeted service level. This offers a novel explanation for the wide variety of value of reliability figures obtained in empirical transport economics research.
Volume (Year): 49 (2013)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- M. Beuthe & Ch. Bouffioux, 2008. "Analysing Qualitative Attributes of Freight Transport from Stated Orders of Preference Experiment," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 105-128, January.
- Patterson, Zachary & Ewing, Gordon O. & Haider, Murtaza, 2010. "How different is carrier choice for third party logistics companies?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(5), pages 764-774, September.
- Bert Vernimmen & Frank Witlox, 2003. "The inventory-theoretic approach to modal choice in freight transport: literature review and case study," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 46(2), pages 5-30.
- Frank Witlox & Els Vandaele, 2005. "Determining the Monetary Value of Quality Attributes in Freight Transportation Using a Stated Preference Approach," Transportation Planning and Technology, Taylor & Francis Journals, vol. 28(2), pages 77-92, April.
- Cullinane, Kevin & Toy, Neal, 2000. "Identifying influential attributes in freight route/mode choice decisions: a content analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(1), pages 41-53, March.
- Simona Bolis & Rico Maggi, 2003. "Logistics Strategy and Transport Service Choices: An Adaptive Stated Preference Experiment," Growth and Change, Wiley Blackwell, vol. 34(4), pages 490-504.
- Jérôme Massiani, 2008. "Can we use hedonic pricing to estimate freight value of time?," EERI Research Paper Series EERI_RP_2008_08, Economics and Econometrics Research Institute (EERI), Brussels.
- Vernimmen, Bert & Dullaert, Wout & Willemé, Peter & Witlox, Frank, 2008. "Using the inventory-theoretic framework to determine cost-minimizing supply strategies in a stochastic setting," International Journal of Production Economics, Elsevier, vol. 115(1), pages 248-259, September.
- N. Lesca, 2010. "Introduction," Post-Print halshs-00640602, HAL.
- Winston, Clifford, 1981. "A Disaggregate Model of the Demand for Intercity Freight Transportation," Econometrica, Econometric Society, vol. 49(4), pages 981-1006, June.
- W. J. Baumol & H. D. Vinod, 1970. "An Inventory Theoretic Model of Freight Transport Demand," Management Science, INFORMS, vol. 16(7), pages 413-421, March.
When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:49:y:2013:i:1:p:190-200. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.