Analysis of damage costs in supply chain systems

Samir A. Alsobhi, Krishna K. Krishnan, Deepak Gupta and Abdulaziz T. Almaktoom

International Journal of Industrial and Systems Engineering, 2018, vol. 28, issue 1, 70-98

Abstract: In a supply chain system, products get damaged during shipping due to transportation hazards and poor packaging. The most common hazards in transportation include shocks, vibrations, accident, handling, etc. Damage from accidents and handling issues are not completely within the control of packaging. However, proper packaging can prevent most of the damage from shocks and vibration. The loss due to damage at each stage of the supply chain network can be reduced by selecting the appropriate packaging, transportation method and by shipping under assembled or unassembled condition. There is not much literature available in the area of goods damaged during shipping as applied to supply chain systems. A mathematical model which minimises the total costs (damage costs, shipping costs, and packaging costs) has been developed to address the issue of damage costs. The model is implemented in MATLAB. The mathematical models were verified by using total enumeration strategy. Case studies to illustrate and validate the procedure were developed and implemented in MATLAB.

Keywords: damage cost; supply chain risk; shortest path; shipping cost; packaging cost. (search for similar items in EconPapers)
Date: 2018
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