IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v32y1998i2p89-97.html
   My bibliography  Save this article

Estimating the effects of carrier transit-time performance on logistics cost and service

Author

Listed:
  • Tyworth, John E.
  • Zeng, Amy Zhaohui

Abstract

Joint determination of an appropriate transportation mode and an optimal inventory control policy is important in supply chain management. We present a method of estimating the effects of carrier transit-time performance on logistics cost and service. Unlike current approaches, this method enables users to develop accurate estimates when non-normal shapes characterize the probability distributions of both demand and lead time. Additionally, the methodology includes two important refinements to the standard transportation-inventory model. First, we relaxed the assumption that the shipping cost is a linear function of the order quantity. Second, we treated transit time as a segment of lead time. We used the gamma distribution to illustrate the flexibility of the method and developed an enhanced sensitivity-analysis tool for examining the effects of carrier transit time on both cost and service. The methodology is appropriate for the transportation of service-sensitive, independent-demand inventory items controlled by a continuous review inventory system.

Suggested Citation

  • Tyworth, John E. & Zeng, Amy Zhaohui, 1998. "Estimating the effects of carrier transit-time performance on logistics cost and service," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(2), pages 89-97, February.
    • Handle: RePEc:eee:transa:v:32:y:1998:i:2:p:89-97
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965-8564(97)00020-7
    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. Randolph W. Hall, 1985. "Dependence between Shipment Size and Mode in Freight Transportation," Transportation Science, INFORMS, vol. 19(4), pages 436-444, November.
    2. Allen, W. Bruce & Mahmoud, Mohamed M. & McNeil, Douglas, 1985. "The importance of time in transit and reliability of transit time for shippers, receivers, and carriers," Transportation Research Part B: Methodological, Elsevier, vol. 19(5), pages 447-456, October.
    3. Gary D. Eppen & R. Kipp Martin, 1988. "Determining Safety Stock in the Presence of Stochastic Lead Time and Demand," Management Science, INFORMS, vol. 34(11), pages 1380-1390, November.
    4. Blumenfeld, Dennis E. & Burns, Lawrence D. & Diltz, J. David & Daganzo, Carlos F., 1985. "Analyzing trade-offs between transportation, inventory and production costs on freight networks," Transportation Research Part B: Methodological, Elsevier, vol. 19(5), pages 361-380, October.
    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. Schmidt, Carise E. & Silva, Arinei C.L. & Darvish, Maryam & Coelho, Leandro C., 2023. "Time-dependent fleet size and mix multi-depot vehicle routing problem," International Journal of Production Economics, Elsevier, vol. 255(C).
    2. Chuantao Cui & Leona Shao-Zhi Li, 2019. "High-speed rail and inventory reduction: firm-level evidence from China," Applied Economics, Taylor & Francis Journals, vol. 51(25), pages 2715-2730, May.
    3. Ochtman, G. & Dekker, R. & van Asperen, E. & Kusters, W., 2004. "Floating stocks in FMCG supply chains," Econometric Institute Research Papers EI 2004-17, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    4. Shirley, Chad & Winston, Clifford, 2004. "Firm inventory behavior and the returns from highway infrastructure investments," Journal of Urban Economics, Elsevier, vol. 55(2), pages 398-415, March.
    5. Brand, Daniel & Parody, Thomas E & Orban, John E & Brown, Vincent J, 2004. "A Benefit/Cost Analysis Of The Commercial Vehicle Information Systems And Networks (Cvisn) Program," Research in Transportation Economics, Elsevier, vol. 8(1), pages 379-401, January.
    6. Minken, Harald & Johansen, Bjørn Gjerde, 2019. "A logistics cost function with explicit transport costs," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    7. Yu Sun & Feng Lian & Zhong-Zhen Yang, 2022. "Optimizing the location of physical shopping centers under the clicks-and-mortar retail mode," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 2288-2314, February.
    8. Ruth Banomyong, 2010. "Supply Chain Dynamics in Asia," Working Papers id:3028, eSocialSciences.
    9. Engblom, Janne & Solakivi, Tomi & Töyli, Juuso & Ojala, Lauri, 2012. "Multiple-method analysis of logistics costs," International Journal of Production Economics, Elsevier, vol. 137(1), pages 29-35.
    10. 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.
    11. Tyworth, John E., 2018. "A note on lead-time paradoxes and a tale of competing prescriptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 139-150.
    12. Bouchery, Yann & Woxenius, Johan & Fransoo, Jan C., 2020. "Identifying the market areas of port-centric logistics and hinterland intermodal transportation," European Journal of Operational Research, Elsevier, vol. 285(2), pages 599-611.
    13. Vernimmen, Bert & Dullaert, Wout & Willemé, Peter & Witlox, Frank, 2008. "Using the inventory-theoretic framework to determine cost-minimizing supply strategies in a stochastic setting," International Journal of Production Economics, Elsevier, vol. 115(1), pages 248-259, September.
    14. He, Xin & Xu, Xinwei & Shen, Yu, 2023. "How climate change affects enterprise inventory management —— From the perspective of regional traffic," Journal of Business Research, Elsevier, vol. 162(C).
    15. Tyworth, John E. & Saldanha, John, 2014. "The lead-time reliability paradox and inconsistent value-of-reliability estimates," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 76-85.
    16. Zhang, Liyunpeng & Zhuang, Yuhang & Ding, Yibing & Liu, Ziwei, 2023. "Infrastructure and poverty reduction: Assessing the dynamic impact of Chinese infrastructure investment in sub-Saharan Africa," Journal of Asian Economics, Elsevier, vol. 84(C).
    17. Ruth Banomyong, 2010. "Supply Chain Dynamics in Asia," Trade Working Papers 22879, East Asian Bureau of Economic Research.

    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. Abate, Megersa & de Jong, Gerard, 2014. "The optimal shipment size and truck size choice – The allocation of trucks across hauls," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 262-277.
    2. Kai-Leung Yung & Jiafu Tang & Andrew W. H. Ip & Dingwei Wang, 2006. "Heuristics for Joint Decisions in Production, Transportation, and Order Quantity," Transportation Science, INFORMS, vol. 40(1), pages 99-116, February.
    3. Scott Webster & Z. Kevin Weng, 2001. "Improving Repetitive Manufacturing Systems: Model and Insights," Operations Research, INFORMS, vol. 49(1), pages 99-106, February.
    4. Tempelmeier, Horst & Bantel, Oliver, 2015. "Integrated optimization of safety stock and transportation capacity," European Journal of Operational Research, Elsevier, vol. 247(1), pages 101-112.
    5. Rietveld, P. & Bruinsma, F. R. & van Vuuren, D. J., 2001. "Coping with unreliability in public transport chains: A case study for Netherlands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(6), pages 539-559, July.
    6. Meyer, Anne & Amberg, Boris, 2018. "Transport concept selection considering supplier milk runs – An integrated model and a case study from the automotive industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 113(C), pages 147-169.
    7. Kumar, Anupam & Evers, Philip T., 2015. "Setting safety stock based on imprecise records," International Journal of Production Economics, Elsevier, vol. 169(C), pages 68-75.
    8. Chen, Youhua Frank, 2005. "Fractional programming approach to two stochastic inventory problems," European Journal of Operational Research, Elsevier, vol. 160(1), pages 63-71, January.
    9. Luca Bertazzi & Maria Grazia Speranza & Walter Ukovich, 2000. "Exact and Heuristic Solutions for a Shipment Problem with Given Frequencies," Management Science, INFORMS, vol. 46(7), pages 973-988, July.
    10. Daniela Favaretto & Alessandro Marin & Marco Tolotti, 2023. "A theoretical validation of the DDMRP reorder policy," Computational Management Science, Springer, vol. 20(1), pages 1-28, December.
    11. Dev, Navin K. & Shankar, Ravi & Swami, Sanjeev, 2020. "Diffusion of green products in industry 4.0: Reverse logistics issues during design of inventory and production planning system," International Journal of Production Economics, Elsevier, vol. 223(C).
    12. William W. Wilson & Bruce L. Dahl, 2000. "Logistical Strategies and Risks in Canadian Grain Marketing," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(2), pages 141-160, July.
    13. Riezebos, Jan, 2006. "Inventory order crossovers," International Journal of Production Economics, Elsevier, vol. 104(2), pages 666-675, December.
    14. Siddhartha Syam & Bala Shetty, 1998. "Coordinated replenishments from multiple suppliers with price discounts," Naval Research Logistics (NRL), John Wiley & Sons, vol. 45(6), pages 579-598, September.
    15. Anton J. Kleywegt & Vijay S. Nori & Martin W. P. Savelsbergh, 2002. "The Stochastic Inventory Routing Problem with Direct Deliveries," Transportation Science, INFORMS, vol. 36(1), pages 94-118, February.
    16. Sandun C. Perera & Suresh P. Sethi, 2023. "A survey of stochastic inventory models with fixed costs: Optimality of (s, S) and (s, S)‐type policies—Discrete‐time case," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 131-153, January.
    17. Sharfuddin Lisan, 2018. "Safety stock determination of uncertain demand and mutually dependent variables," International Journal of Business and Social Research, LAR Center Press, vol. 8(3), pages 1-11, March.
    18. 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.
    19. Harmen W. Bouma & Ruud H. Teunter, 2016. "The routed inventory pooling problem with multiple lateral transshipments," International Journal of Production Research, Taylor & Francis Journals, vol. 54(12), pages 3523-3533, June.
    20. Nguyen, Christine & Dessouky, Maged & Toriello, Alejandro, 2014. "Consolidation strategies for the delivery of perishable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 108-121.

    More about this item

    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:eee:transa:v:32:y:1998:i:2:p:89-97. 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/wps/find/journaldescription.cws_home/547/description#description .

    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.