Multi-level inventory management decisions with transportation cost consideration

Alireza Madadi, Mary E. Kurz and Jalal Ashayeri

Transportation Research Part E: Logistics and Transportation Review, 2010, vol. 46, issue 5, 719-734

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.

Keywords: Inventory; management; Decentralized; ordering; Centralized; ordering; Transportation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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