IDEAS home Printed from https://ideas.repec.org/a/beo/journl/v56y2011i190p77-102.html
   My bibliography  Save this article

Transport Fleet Sizing By Using Make And Buy Decision-Making

Author

Listed:
  • Djurdjica Stojanović
  • Svetlana Nikoličić
  • Milica Miličić

Abstract

Cost reduction is among the main quoted reasons for logistics outsourcing, while transport capacities and operations are among the most outsourced logistics areas. However, according to transaction costs theory, there is often room for transport insourcing. Furthermore, nowadays many authors stress that mixed solutions can give better results than “make” or “buy” alternatives.“Make or buy” decision-making normative models, methods, and procedures in transport planning are not much explored. Instead, research is rather focused on carrier selection techniques, whereby it is supposed that outsourcing transport capacities is the most suitable solution. The purpose of this paper is to contribute to the body of literature on classical “make-or-buy” decision-making in transport fleet sizing in a non-logistics enterprise. It goes beyond the basic “make or buy” decisionmaking, and intermediate solutions (i.e., “make and buy”) are explored. Practical directions are given according to theoretical principles, and a case study is used to exemplify the main deductions.The research also has practical implications. Many enterprises in transition economies have faced the question of what to do with their in-house transport fleets. The obtained results are of interest to merchants and manufacturing enterprises that already have a private transport fleet and are considering how to rationalize it.

Suggested Citation

  • Djurdjica Stojanović & Svetlana Nikoličić & Milica Miličić, 2011. "Transport Fleet Sizing By Using Make And Buy Decision-Making," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 56(190), pages 77-102, July – Se.
  • Handle: RePEc:beo:journl:v:56:y:2011:i:190:p:77-102
    as

    Download full text from publisher

    File URL: http://www.ekof.bg.ac.rs/wp-content/uploads/2014/06/190-2-1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hall, Randolph W., 1999. "Stochastic freight flow patterns: implications for fleet optimization," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(6), pages 449-465, August.
    2. List, George F. & Wood, Bryan & Nozick, Linda K. & Turnquist, Mark A. & Jones, Dean A. & Kjeldgaard, Edwin A. & Lawton, Craig R., 2003. "Robust optimization for fleet planning under uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(3), pages 209-227, May.
    3. Kavussanos, Manolis G. & Alizadeh-M, Amir H., 2001. "Seasonality patterns in dry bulk shipping spot and time charter freight rates," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(6), pages 443-467, December.
    4. Bertazzi, Luca & Speranza, Maria Grazia & Ukovich, Walter, 1997. "Minimization of logistic costs with given frequencies," Transportation Research Part B: Methodological, Elsevier, vol. 31(4), pages 327-340, August.
    5. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
    6. Bjornar Aas & Arnt Buvik & Djurdjica Cakic, 2008. "Outsourcing of logistics activities in a complex supply chain: a case study from the Norwegian oil and gas industry," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 1(3), pages 280-296.
    7. Platts, K. W. & Probert, D. R. & Canez, L., 2002. "Make vs. buy decisions: A process incorporating multi-attribute decision-making," International Journal of Production Economics, Elsevier, vol. 77(3), pages 247-257, June.
    8. Min, Hokey, 1998. "A personal-computer assisted decision support system for private versus common carrier selection," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 34(3), pages 229-241, September.
    9. Kochel, Peter & Kunze, Sophie & Nielander, Ulf, 2003. "Optimal control of a distributed service system with moving resources: Application to the fleet sizing and allocation problem," International Journal of Production Economics, Elsevier, vol. 81(1), pages 443-459, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria CIEŚLA, 2015. "Outsourcing strategy selection for transportation services based on the Make or Buy decision," Transport Problems, Silesian University of Technology, Faculty of Transport, vol. 10(2), pages 91-98, June.
    2. Andrey BORODIN & Vitaly PANIN, 2018. "The Distribution Of Marshalling Work Of Industrial And Mainline Rail Transport," Transport Problems, Silesian University of Technology, Faculty of Transport, vol. 13(4), pages 37-46, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kallrath, J. & Klosterhalfen, S.T. & Walter, M. & Fischer, G. & Blackburn, R., 2017. "Payload-based fleet optimization for rail cars in the chemical industry," European Journal of Operational Research, Elsevier, vol. 259(1), pages 113-129.
    2. Adil Baykasoğlu & Nurhan Dudaklı & Kemal Subulan & A. Serdar Taşan, 2022. "An integrated fleet planning model with empty vehicle repositioning for an intermodal transportation system," Operational Research, Springer, vol. 22(3), pages 2063-2098, July.
    3. John S. Heywood & W.S. Siebert & Xiangdong Wei, 2011. "Estimating the Use of Agency Workers: Can Family-Friendly Practices Reduce Their Use?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(3), pages 535-564, July.
    4. Jae Song & David J Price & Fatih Guvenen & Nicholas Bloom & Till von Wachter, 2019. "Firming Up Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 1-50.
    5. Dermot Leahy & Catia Montagna, 2006. "'Make-or-Buy' in International Oligopoly and the Role of Competitive Pressure," Dundee Discussion Papers in Economics 197, Economic Studies, University of Dundee.
    6. James Spletzer & Elizabeth Weber Handwerker, 2015. "The Role of Establishments and the Concentration of Occupations in Wage Inequality," Working Papers id:7427, eSocialSciences.
    7. Patrick Francois & Joanne Roberts, 2003. "Contracting Productivity Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 59-85.
    8. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
    9. Niquidet, Kurt & O'Kelly, Glen, 2010. "Forest-mill integration: A transaction cost perspective," Forest Policy and Economics, Elsevier, vol. 12(3), pages 207-212, March.
    10. Garcia, Angel & Jaumandreu, Jordi & Rodriguez, Cesar, 2004. "Innovation and jobs: evidence from manufacturing firms," MPRA Paper 1204, University Library of Munich, Germany.
    11. Corinne Perraudin & Héloïse Petit & Nadine Thevenot & Bruno Tinel & Julie Valentin, 2009. "Inter-firm dependency and employment inequalities : Theoretical hypotheses and empirical tests," Post-Print halshs-00375550, HAL.
    12. Luca Bertazzi & Maria Grazia Speranza, 1999. "Minimizing logistic costs in multistage supply chains," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(4), pages 399-417, June.
    13. Kochel, Peter, 2004. "Finite queueing systems--structural investigations and optimal design," International Journal of Production Economics, Elsevier, vol. 88(2), pages 157-171, March.
    14. Axarloglou, Kostas & Visvikis, Ilias & Zarkos, Stefanos, 2013. "The time dimension and value of flexibility in resource allocation: The case of the maritime industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 52(C), pages 35-48.
    15. Bernd Görzig & Andreas Stephan, 2002. "Outsourcing and Firm-level Performance," Discussion Papers of DIW Berlin 309, DIW Berlin, German Institute for Economic Research.
    16. Basu, Arnab K. & Chau, Nancy H. & Soundararajan, Vidhya, 2019. "Wage fairness in a subcontracted labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 24-42.
    17. Giuseppe Bognetti & Michele Santoni, 2010. "Can domestic unions gain from offshoring?," Journal of Economics, Springer, vol. 100(1), pages 51-67, May.
    18. Marcello Estevao & Saul Lach, 1999. "Measuring temporary labor outsourcing in U.S. manufacturing," Finance and Economics Discussion Series 1999-57, Board of Governors of the Federal Reserve System (U.S.).
    19. Henderson, Vernon & Lee, Todd & Lee, Yung Joon, 2001. "Scale Externalities in Korea," Journal of Urban Economics, Elsevier, vol. 49(3), pages 479-504, May.
    20. Elise M. Stevens & Andrea C. Villanti & Glenn Leshner & Theodore L. Wagener & Brittney Keller-Hamilton & Darren Mays, 2021. "Integrating Self-Report and Psychophysiological Measures in Waterpipe Tobacco Message Testing: A Novel Application of Multi-Attribute Decision Modeling," IJERPH, MDPI, vol. 18(22), pages 1-12, November.

    More about this item

    Keywords

    Transport Management; Fleet Sizing; Make and Buy Decision; Optimization; Transport Outsourcing; Privatization;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D29 - Microeconomics - - Production and Organizations - - - Other
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M29 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:beo:journl:v:56:y:2011:i:190:p:77-102. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Goran Petrić (email available below). General contact details of provider: https://edirc.repec.org/data/efbeoyu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.