IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v131y2011i2p595-603.html
   My bibliography  Save this article

Multi-item dynamic lot-sizing with delayed transportation policy

Author

Listed:
  • Sancak, Emre
  • Salman, F. Sibel

Abstract

We optimize ordering and inbound shipment decisions for a manufacturer that sources multiple items from a single supplier. The objective is to satisfy the requirements in the production plan with minimum transportation and inventory holding costs over a multi-period planning horizon. Transportation costs are charged to the manufacturer on a per truck shipment basis. We investigate the option of delaying a less-than-full truckload shipment to the next period, by utilizing the safety stocks as needed. We analyze the impact of delaying shipments on both cost and service levels in stochastic environments through experiments with data from a bus manufacturer. The results indicate that the proposed policy reduces both holding and transportation costs without creating much stock-out risk.

Suggested Citation

  • Sancak, Emre & Salman, F. Sibel, 2011. "Multi-item dynamic lot-sizing with delayed transportation policy," International Journal of Production Economics, Elsevier, vol. 131(2), pages 595-603, June.
    • Handle: RePEc:eee:proeco:v:131:y:2011:i:2:p:595-603
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(11)00044-2
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kiesmüller, G.P., 2009. "A multi-item periodic replenishment policy with full truckloads," International Journal of Production Economics, Elsevier, vol. 118(1), pages 275-281, March.
    2. Leroy B. Schwarz & James E. Ward & Xin Zhai, 2006. "On the Interactions Between Routing and Inventory-Management Policies in a One-Warehouse N-Retailer Distribution System," Manufacturing & Service Operations Management, INFORMS, vol. 8(3), pages 253-272, September.
    3. Randolph W. Hall, 1992. "A Note on Bounds for Direct Shipping Cost," Management Science, INFORMS, vol. 38(8), pages 1212-1214, August.
    4. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
    5. Van Eijs, M. J. G., 1994. "Multi-item inventory systems with joint ordering and transportation decisions," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 285-292, June.
    6. Rizk, Nafee & Martel, Alain & Ramudhin, Amar, 2006. "A Lagrangean relaxation algorithm for multi-item lot-sizing problems with joint piecewise linear resource costs," International Journal of Production Economics, Elsevier, vol. 102(2), pages 344-357, August.
    7. Sven Axsäter, 2001. "A Note on Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 47(9), pages 1306-1310, September.
    8. Sundarakani, Balan & de Souza, Robert & Goh, Mark & Wagner, Stephan M. & Manikandan, Sushmera, 2010. "Modeling carbon footprints across the supply chain," International Journal of Production Economics, Elsevier, vol. 128(1), pages 43-50, November.
    9. Swenseth, Scott R. & Godfrey, Michael R., 2002. "Incorporating transportation costs into inventory replenishment decisions," International Journal of Production Economics, Elsevier, vol. 77(2), pages 113-130, May.
    10. Qu, Wendy W. & Bookbinder, James H. & Iyogun, Paul, 1999. "An integrated inventory-transportation system with modified periodic policy for multiple products," European Journal of Operational Research, Elsevier, vol. 115(2), pages 254-269, June.
    11. Blackburn, Joseph D. & Kropp, Dean H. & Millen, Robert A., 1985. "MRP system nervousness: Causes and cures," Engineering Costs and Production Economics, Elsevier, vol. 9(1-3), pages 141-146, April.
    12. Nejib Ben-Khedher & Candace A. Yano, 1994. "The Multi-Item Joint Replenishment Problem with Transportation and Container Effects," Transportation Science, INFORMS, vol. 28(1), pages 37-54, February.
    13. Chung-Lun Li & Vernon Ning Hsu & Wen-Qiang Xiao, 2004. "Dynamic Lot Sizing with Batch Ordering and Truckload Discounts," Operations Research, INFORMS, vol. 52(4), pages 639-654, August.
    14. Gerard Cachon, 2001. "Managing a Retailer's Shelf Space, Inventory, and Transportation," Manufacturing & Service Operations Management, INFORMS, vol. 3(3), pages 211-229, July.
    15. Sawik, Tadeusz, 2009. "Coordinated supply chain scheduling," International Journal of Production Economics, Elsevier, vol. 120(2), pages 437-451, August.
    16. Cardos, Manuel & Garcia-Sabater, Jose P., 2006. "Designing a consumer products retail chain inventory replenishment policy with the consideration of transportation costs," International Journal of Production Economics, Elsevier, vol. 104(2), pages 525-535, December.
    17. Banerjee, Avijit, 2009. "Simultaneous determination of multiproduct batch and full truckload shipment schedules," International Journal of Production Economics, Elsevier, vol. 118(1), pages 111-117, March.
    18. Lee, Woon-Seek & Han, Jong-Han & Cho, Sung-Jin, 2005. "A heuristic algorithm for a multi-product dynamic lot-sizing and shipping problem," International Journal of Production Economics, Elsevier, vol. 98(2), pages 204-214, November.
    19. Morabito, Reinaldo & Morales, Silvia Regina & Widmer, João Alexandre, 2000. "Loading optimization of palletized products on trucks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(4), pages 285-296, December.
    20. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    21. Jung, Jung Woo & Lee, Young Hae, 2010. "Heuristic algorithms for production and transportation planning through synchronization of a serial supply chain," International Journal of Production Economics, Elsevier, vol. 124(2), pages 433-447, April.
    22. Guillermo Gallego & David Simchi-Levi, 1990. "On the Effectiveness of Direct Shipping Strategy for the One-Warehouse Multi-Retailer R-Systems," Management Science, INFORMS, vol. 36(2), pages 240-243, February.
    23. Maria Grazia Speranza & Walter Ukovich, 1994. "Minimizing Transportation and Inventory Costs for Several Products on a Single Link," Operations Research, INFORMS, vol. 42(5), pages 879-894, October.
    24. Pundoor, Guruprasad & Chen, Zhi-Long, 2009. "Joint cyclic production and delivery scheduling in a two-stage supply chain," International Journal of Production Economics, Elsevier, vol. 119(1), pages 55-74, May.
    25. Sila Çetinkaya & Chung-Yee Lee, 2000. "Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 46(2), pages 217-232, February.
    26. Michael J. Fry & Roman Kapuscinski & Tava Lennon Olsen, 2001. "Coordinating Production and Delivery Under a (z, Z)-Type Vendor-Managed Inventory Contract," Manufacturing & Service Operations Management, INFORMS, vol. 3(2), pages 151-173, August.
    27. Mula, J. & Poler, R. & Garcia-Sabater, J.P. & Lario, F.C., 2006. "Models for production planning under uncertainty: A review," International Journal of Production Economics, Elsevier, vol. 103(1), pages 271-285, September.
    28. Mustafa Çagri Gürbüz & Kamran Moinzadeh & Yong-Pin Zhou, 2007. "Coordinated Replenishment Strategies in Inventory/Distribution Systems," Management Science, INFORMS, vol. 53(2), pages 293-307, February.
    29. Ertogral, Kadir, 2008. "Multi-item single source ordering problem with transportation cost: A Lagrangian decomposition approach," European Journal of Operational Research, Elsevier, vol. 191(1), pages 156-165, November.
    30. van Norden, Linda & van de Velde, Steef, 2005. "Multi-product lot-sizing with a transportation capacity reservation contract," European Journal of Operational Research, Elsevier, vol. 165(1), pages 127-138, August.
    31. Kang, Jae-Hun & Kim, Yeong-Dae, 2010. "Coordination of inventory and transportation managements in a two-level supply chain," International Journal of Production Economics, Elsevier, vol. 123(1), pages 137-145, January.
    32. Shoshana Anily & Michal Tzur, 2005. "Shipping Multiple Items by Capacitated Vehicles: An Optimal Dynamic Programming Approach," Transportation Science, INFORMS, vol. 39(2), pages 233-248, May.
    33. M. Florian & J. K. Lenstra & A. H. G. Rinnooy Kan, 1980. "Deterministic Production Planning: Algorithms and Complexity," Management Science, INFORMS, vol. 26(7), pages 669-679, July.
    34. Çetinkaya, SIla & Bookbinder, James H., 2003. "Stochastic models for the dispatch of consolidated shipments," Transportation Research Part B: Methodological, Elsevier, vol. 37(8), pages 747-768, September.
    35. Claudia Archetti & Luca Bertazzi & Gilbert Laporte & Maria Grazia Speranza, 2007. "A Branch-and-Cut Algorithm for a Vendor-Managed Inventory-Routing Problem," Transportation Science, INFORMS, vol. 41(3), pages 382-391, August.
    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. Aqlan, Faisal & Lam, Sarah S. & Ramakrishnan, Sreekanth, 2014. "An integrated simulation–optimization study for consolidating production lines in a configure-to-order production environment," International Journal of Production Economics, Elsevier, vol. 148(C), pages 51-61.
    2. Martin Grunewald & Thomas Volling & Christoph Müller & Thomas S. Spengler, 2018. "Multi-item single-source ordering with detailed consideration of transportation capacities," Journal of Business Economics, Springer, vol. 88(7), pages 971-1007, September.
    3. Zhang, Zhi-Hai & Jiang, Hai & Pan, Xunzhang, 2012. "A Lagrangian relaxation based approach for the capacitated lot sizing problem in closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 140(1), pages 249-255.
    4. Wang, Xuping & Ruan, Junhu & Shi, Yan, 2012. "A recovery model for combinational disruptions in logistics delivery: Considering the real-world participators," International Journal of Production Economics, Elsevier, vol. 140(1), pages 508-520.
    5. Yuan-Shyi Peter Chiu & Victoria Chiu & Tsu-Ming Yeh & Hua-Yao Wu, 2020. "Incorporating Outsourcing Strategy and Quality Assurance into a Multiproduct Manufacturer–Retailer Coordination Replenishing Decision," Mathematics, MDPI, vol. 8(12), pages 1-19, December.
    6. Yang, Liu & Liu, Kanglin & Zhang, Juan & Zelbst, Pamela J., 2024. "Inventory management with actual palletized transportation costs and lost sales," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 184(C).
    7. Ali, Agha Iqbal & O'Connor, Debra J., 2013. "Using truck-inventory-cost to obtain solutions to multi-period logistics models," International Journal of Production Economics, Elsevier, vol. 143(1), pages 144-150.
    8. Mosca, Alyssa & Vidyarthi, Navneet & Satir, Ahmet, 2019. "Integrated transportation – inventory models: A review," Operations Research Perspectives, Elsevier, vol. 6(C).

    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. Engebrethsen, Erna & Dauzère-Pérès, Stéphane, 2019. "Transportation mode selection in inventory models: A literature review," European Journal of Operational Research, Elsevier, vol. 279(1), pages 1-25.
    2. Mosca, Alyssa & Vidyarthi, Navneet & Satir, Ahmet, 2019. "Integrated transportation – inventory models: A review," Operations Research Perspectives, Elsevier, vol. 6(C).
    3. Saravanan Venkatachalam & Arunachalam Narayanan, 2016. "Efficient formulation and heuristics for multi-item single source ordering problem with transportation cost," International Journal of Production Research, Taylor & Francis Journals, vol. 54(14), pages 4087-4103, July.
    4. Leandro C. Coelho & Jean-François Cordeau & Gilbert Laporte, 2014. "Thirty Years of Inventory Routing," Transportation Science, INFORMS, vol. 48(1), pages 1-19, February.
    5. Brahimi, Nadjib & Absi, Nabil & Dauzère-Pérès, Stéphane & Nordli, Atle, 2017. "Single-item dynamic lot-sizing problems: An updated survey," European Journal of Operational Research, Elsevier, vol. 263(3), pages 838-863.
    6. Andersson, Jonas & Malmberg, Filip & Marklund, Johan, 2023. "Exact analysis of One-Warehouse-Multiple-Retailer inventory systems with quantity restricted deliveries," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1161-1172.
    7. Farhat, Mlouka & Akbalik, Ayse & Hadj-Alouane, Atidel B. & Sauer, Nathalie, 2019. "Lot sizing problem with batch ordering under periodic buyback contract and lost sales," International Journal of Production Economics, Elsevier, vol. 208(C), pages 500-511.
    8. Dinçer Konur & Joseph Geunes, 2019. "Integrated districting, fleet composition, and inventory planning for a multi-retailer distribution system," Annals of Operations Research, Springer, vol. 273(1), pages 527-559, February.
    9. Chung-Yee Lee & Sila Çetinkaya & Wikrom Jaruphongsa, 2003. "A Dynamic Model for Inventory Lot Sizing and Outbound Shipment Scheduling at a Third-Party Warehouse," Operations Research, INFORMS, vol. 51(5), pages 735-747, October.
    10. Yves Crama & Mahmood Rezaei & Martin Savelsbergh & Tom Van Woensel, 2018. "Stochastic Inventory Routing for Perishable Products," Transportation Science, INFORMS, vol. 52(3), pages 526-546, June.
    11. Kaya, Onur & Kubalı, Deniz & Örmeci, Lerzan, 2013. "A coordinated production and shipment model in a supply chain," International Journal of Production Economics, Elsevier, vol. 143(1), pages 120-131.
    12. van Norden, Linda & van de Velde, Steef, 2005. "Multi-product lot-sizing with a transportation capacity reservation contract," European Journal of Operational Research, Elsevier, vol. 165(1), pages 127-138, August.
    13. Kang, Jae-Hun & Kim, Yeong-Dae, 2010. "Coordination of inventory and transportation managements in a two-level supply chain," International Journal of Production Economics, Elsevier, vol. 123(1), pages 137-145, January.
    14. Lai, Minghui & Cai, Xiaoqiang & Li, Xiang, 2017. "Mechanism design for collaborative production-distribution planning with shipment consolidation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 106(C), pages 137-159.
    15. Jans, R.F. & Degraeve, Z., 2005. "Modeling Industrial Lot Sizing Problems: A Review," ERIM Report Series Research in Management ERS-2005-049-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    16. Akbalik, Ayse & Hadj-Alouane, Atidel B. & Sauer, Nathalie & Ghribi, Houcem, 2017. "NP-hard and polynomial cases for the single-item lot sizing problem with batch ordering under capacity reservation contract," European Journal of Operational Research, Elsevier, vol. 257(2), pages 483-493.
    17. Piewthongngam, Kullapapruk & Pathumnakul, Supachai & Homkhampad, Suphakan, 2013. "An interactive approach to optimize production–distribution planning for an integrated feed swinecompany," International Journal of Production Economics, Elsevier, vol. 142(2), pages 290-301.
    18. Tiacci, Lorenzo & Saetta, Stefano, 2009. "An approach to evaluate the impact of interaction between demand forecasting method and stock control policy on the inventory system performances," International Journal of Production Economics, Elsevier, vol. 118(1), pages 63-71, March.
    19. Jenny Carolina Saldana Cortés, 2011. "Programación semidefinida aplicada a problemas de cantidad económica de pedido," Documentos CEDE 8735, Universidad de los Andes, Facultad de Economía, CEDE.
    20. Darwish, M.A. & Odah, O.M., 2010. "Vendor managed inventory model for single-vendor multi-retailer supply chains," European Journal of Operational Research, Elsevier, vol. 204(3), pages 473-484, August.

    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:eee:proeco:v:131:y:2011:i:2:p:595-603. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    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.