In many practical situations the coordination of transportation management and inventory management may lead to considerable cost reductions. Transportation management includes the application of different types of shipment consolidation policies. Shipment consolidation takes into account the logistics strategy of combining two or more shipment orders to optimize transportation. When the shipment consolidation policy changes, the shipment lead time changes as well and if the lead time changes, the inventory policy needs to be re-evaluated, since changing lead times affect customer service. In this paper the lead time comprises two elements: waiting time due to order consolidation and the shipment time. The lead time is an important parameter for inventory management. We derive approximations for the lead time behaviour in (s,nQ) models where the items are consolidated according to different types of consolidation policies.
|Title of host publication||Quantitative Approaches to Distribution Logistics and Supply Chain Management|
|Editors||A. Klose, M.G. Speranza, L. Wassenhove, van|
|Place of Publication||Heidelberg|
|Publication status||Published - 2002|
|Name||Lecture Notes in Economics and Mathematical Systems|