Coordinated inventory replenishment and outsourced transportation operations

Ülkü Gürler, Osman Alp and Nasuh Çağdaş Büyükkaramikli

Transportation Research Part E: Logistics and Transportation Review, 2014, vol. 70, issue C, 400-415

Abstract: We consider a one-warehouse N retailers supply chain with stochastic demand. Inventory is managed in-house whereas transportation is outsourced to a 3PL provider. We develop analytical expressions for the operating characteristics under both periodic and continuous joint replenishment policies. We identify the settings where a periodic review policy is comparable to a continuous review one. In our numerical test-bed, the periodic policy performed best in larger supply chains operating with larger trucks. We also observed that if the excess utilization charge is less than 25%, outsourcing becomes beneficial even if outsourcing cost is 25% more than the in-house fleet costs.

Keywords: Third party logistics; Inventory; Transportation; Coordinated logistics (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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DOI: 10.1016/j.tre.2014.08.004

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