Optimization model for transportation planning with demand uncertainties

Dilupa Nakandala, Henry Lau, Jingjing Zhang
  • Industrial Management & Data Systems, September 2014, Emerald
  • DOI: 10.1108/imds-06-2014-0192

cost optimized transportation planning

What is it about?

Negotiations with suppliers for a short lead time at an added cost to minimise stockouts is a strategic approach for increased customer satisfaction. However, challenges are with cost optimised decisions on how different approaches affect the cost components of holding, back-ordering and purchasing cost of supplies. This research investigates the impacts of changing supplier lead time on inventory cost components for informed decision making in inventory system planning for cost optimization by logistics practitioners.

Why is it important?

This paper analyses a practical approach taken by logistics practitioners and develops less complex, more pragmatic methods. It highlights the unique characteristics and features of two approaches that can help practitioners in making the right choice when faced with the identified logistics issue.

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