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Transportation mode selection with positive manufacturing lead time

Author

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  • Kiesmüller, G.P.
  • de Kok, A.G.
  • Fransoo, J.C.

Abstract

In this paper we present a dual supply model taking into account that in many industries the replenishment cycle does not only involve the physical distribution of goods, but also the manufacturing of products. Further, we suggest postponing the transportation mode decision until the products are available for shipping. We investigate a class of order-up-to policies and show how to compute the optimal policy parameters. Our model enables us to quantify the value of the postponement of the transportation decision and the value of using an additional slow mode instead of only using the existing fast mode. In a numerical study the influence of various model parameters is investigated and it is shown that the use of a slow mode can be economically beneficial, especially for low value items.

Suggested Citation

  • Kiesmüller, G.P. & de Kok, A.G. & Fransoo, J.C., 2005. "Transportation mode selection with positive manufacturing lead time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(6), pages 511-530, November.
    • Handle: RePEc:eee:transe:v:41:y:2005:i:6:p:511-530
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    Citations

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    Cited by:

    1. Chiang, Chi, 2010. "An order expediting policy for continuous review systems with manufacturing lead-time," European Journal of Operational Research, Elsevier, vol. 203(2), pages 526-531, June.
    2. 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.
    3. Xiong, Xing & Li, Yanzhi & Yang, Wenguo & Shen, Huaxiao, 2022. "Data-driven robust dual-sourcing inventory management under purchase price and demand uncertainties," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
    4. Andrew Ensor & Felipe Lillo, 2016. "Colored-Edge Graph Approach for the Modeling of Multimodal Transportation Systems," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 33(01), pages 1-21, February.
    5. Chen, Xu & Wang, Xiaojun, 2016. "Effects of carbon emission reduction policies on transportation mode selections with stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 196-205.
    6. Serel, Doğan A., 2015. "Production and pricing policies in dual sourcing supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 76(C), pages 1-12.
    7. Christian Finnsgård & Joakim Kalantari & Zeeshan Raza & Violeta Roso & Johan Woxenius, 2018. "Swedish shippers’ strategies for coping with slow-steaming in deep sea container shipping," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-24, December.
    8. 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).
    9. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    10. 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.

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