Shipment Consolidation Policy under Uncertainty of Customer Order for Sustainable Supply Chain Management

Kyunghoon Kang, Ki-sung Hong, Ki Hong Kim and Chulung Lee
Additional contact information
Kyunghoon Kang: Graduate School of Information Security, Korea University, Seongbuk-gu, Seoul 02841, Korea
Ki-sung Hong: Graduate School of Management of Technology, Korea University, Seongbuk-gu, Seoul 02841, Korea
Ki Hong Kim: Graduate School of Industrial Management Engineering, Korea University, Seongbuk-gu, Seoul 02841, Korea
Chulung Lee: Division of Industrial Management Engineering, Korea University, Seongbuk-gu, Seoul 02841, Korea

Sustainability, 2017, vol. 9, issue 9, 1-17

Abstract: With increasing concern over the environment, shipment consolidation has become one of a main initiative to reduce CO 2 emissions and transportation cost among the logistics service providers. Increased delivery time caused by shipment consolidation may lead to customer’s order cancellation. Thus, order cancellation should be considered as a factor in order uncertainty to determine the optimal shipment consolidation policy. We develop mathematical models for quantity-based and time-based policies and obtain optimality properties for the models. Efficient algorithms using optimal properties are provided to compute the optimal parameters for ordering and shipment decisions. To compare the performances of the quantity-based policy with the time-based policy, extensive numerical experiments are conducted, and the total cost is compared.

Keywords: inventory control; shipment consolidation; quantity-based policy; order cancellation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/9/9/1675/pdf (application/pdf)
https://www.mdpi.com/2071-1050/9/9/1675/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:9:y:2017:i:9:p:1675-:d:112546

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().