IDEAS home Printed from https://ideas.repec.org/a/ibf/beaccr/v4y2012i2p49-59.html
   My bibliography  Save this article

Teaching Supply Chain Management Students About Using Actual Motor Carrier Freight Rates In Purchase Lotsizing Models

Author

Listed:
  • Michael Godfrey
  • Andrew Manikas

Abstract

In this paper, we analyze a purchase lot-sizing decision that includes transport cost using actual motor carrier freight rates. Lot-sizing models in the literature either estimate motor carrier freight rates with a continuous function or simplify less-than-truckload freight rates unrealistically by using too few weightbreak ranges. We present an Excel Solver model that we use in a supply chain management class to teach students the following principles: how to look up less-than-truckload freight rates using a carrier’s software, how to calculate less-than-truckload and truckload freight rates, to decide whether to overdeclare (artificially inflate) the weight of a less-than-truckload shipment to lower the freight charge, and how to find the purchase lot size that minimizes annual logistics cost. We assume that all-units purchase quantity discounts are offered by the supplier and the product is shipped Free On Board (FOB) Origin, Freight Collect. We discuss how to solve this model with Excel’s GRG Nonlinear Solver.

Suggested Citation

  • Michael Godfrey & Andrew Manikas, 2012. "Teaching Supply Chain Management Students About Using Actual Motor Carrier Freight Rates In Purchase Lotsizing Models," Business Education and Accreditation, The Institute for Business and Finance Research, vol. 4(2), pages 49-59.
  • Handle: RePEc:ibf:beaccr:v:4:y:2012:i:2:p:49-59
    as

    Download full text from publisher

    File URL: http://www.theibfr2.com/RePEc/ibf/beaccr/bea-v4n2-2012/BEA-V4N2-2012-5.pdf
    Download Restriction: no

    More about this item

    Keywords

    Excel Solver; linear programming; logistics; purchase lot-sizing;

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibf:beaccr:v:4:y:2012:i:2:p:49-59. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mercedes Jalbert). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.