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THE INTERACTION OF TRANSPORTATION AND INVENTORY DECISIONS
Author(s) -
Constable Gordon K.,
Whybark D. Clay
Publication year - 1978
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1978.tb00754.x
Subject(s) - heuristic , operations research , reliability (semiconductor) , computer science , inventory management , order (exchange) , transportation theory , inventory cost , reorder point , cycle count , range (aeronautics) , operations management , economic order quantity , business , mathematical optimization , economics , mathematics , supply chain , engineering , marketing , power (physics) , physics , finance , quantum mechanics , artificial intelligence , aerospace engineering
The management of inventories and determination of transportation policy are normally carried out by different groups of people in an organization. These activities interact, however, when the transportation is used to replace inventory and when the transportation alternatives have different speed, reliability, and cost characteristics. This paper presents exact and heuristic procedures for jointly determining the inventory reorder points, order quantities, and transportation alternatives that provide minimum total transportation and inventory costs. The effectiveness of each procedure is demonstrated for a broad range of problems. The heuristic procedure was also applied to actual company data to determine the potential for cost savings. The results showed that savings were possible both from improving the current procedures and from applying the procedure developed in this study.