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A demand-responsive inventory management model for a coal port terminal

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Listed:
  • Peipei Ding
  • Shi Qiang Liu
  • Dewang Chen
  • Erhan Kozan

Abstract

Port terminals are essential hubs in the coal supply chain due to scarce stockyard capacities. Seasonal demand fluctuations often cause storage shortages and shipment demurrage during peak periods. This study proposes an improved Wagner-Whitin (W-W)-based inventory approach for multiple coal brands at port terminals in a demand-responsive way. The objective is to minimise the summation of purchase, setup, capital and storage costs. Constraints involve seasonal fluctuations of storage capacities, demand, order intervals and differences in storage durations across coal brands. Case studies show that the improved W-W algorithm can make cost-effective ordering decisions under various scenarios. The impact of storage capacity constraints on total cost during transitions between peak and off-peak periods is analysed. Sensitivity analysis shows shorter storage durations guarantee coal quality but increase ordering frequency. Reducing setup cost is effective in offsetting adverse effects of limited storage capacity with a nonlinear relation between capacity and cost. [Submitted: 1 November 2024; Accepted: 14 March 2025]

Suggested Citation

  • Peipei Ding & Shi Qiang Liu & Dewang Chen & Erhan Kozan, 2026. "A demand-responsive inventory management model for a coal port terminal," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 21(3/4), pages 424-452.
    • Handle: RePEc:ids:eujine:v:21:y:2026:i:3/4:p:424-452
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