In this paper we consider a stochastic multi item inventory problem. A retailer
sells multiple products with stochastic demand and is replenished periodically from
a supplier with ample stock. At each order instant it is decided which product to
order and how much to order. For the delivery of the products trucks with a finite
capacity are available. The dispatched trucks arrive at the retailer after a constant
leadtime and with each truck fixed shipping costs are charged independent on the
number of units shipped. Additionally, linear holding and backorder costs at the
end of a review period are considered. Since fixed transportation costs are high
coordination of orders and full truckload shipments can benefit from economies of
scale.
We propose a dynamic order-up-to policy where initial ordersizes can be reduced
as well as enlarged to create full truckloads. We show how to compute the policy
parameters and in a detailed numerical study we compare our policy with a lower
bound and an uncoordinated periodic replenishment policy. An excellent cost performance
of the proposed policy can be observed when average time between two
shipments is not too large and fixed shipping costs are high.
Original language | English |
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Place of Publication | Eindhoven |
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Publisher | Technische Universiteit Eindhoven |
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Number of pages | 16 |
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ISBN (Print) | 90-386-0775-X |
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Publication status | Published - 2006 |
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Name | BETA publicatie : working papers |
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Volume | 174 |
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ISSN (Print) | 1386-9213 |
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