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Shipment Consolidation Policy under Uncertainty of Customer Order for Sustainable Supply Chain Management

Author

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  • Kyunghoon Kang

    (Graduate School of Information Security, Korea University, Seongbuk-gu, Seoul 02841, Korea)

  • Ki-sung Hong

    (Graduate School of Management of Technology, Korea University, Seongbuk-gu, Seoul 02841, Korea)

  • Ki Hong Kim

    (Graduate School of Industrial Management Engineering, Korea University, Seongbuk-gu, Seoul 02841, Korea)

  • Chulung Lee

    (Division of Industrial Management Engineering, Korea University, Seongbuk-gu, Seoul 02841, Korea)

Abstract

With increasing concern over the environment, shipment consolidation has become one of a main initiative to reduce CO 2 emissions and transportation cost among the logistics service providers. Increased delivery time caused by shipment consolidation may lead to customer’s order cancellation. Thus, order cancellation should be considered as a factor in order uncertainty to determine the optimal shipment consolidation policy. We develop mathematical models for quantity-based and time-based policies and obtain optimality properties for the models. Efficient algorithms using optimal properties are provided to compute the optimal parameters for ordering and shipment decisions. To compare the performances of the quantity-based policy with the time-based policy, extensive numerical experiments are conducted, and the total cost is compared.

Suggested Citation

  • Kyunghoon Kang & Ki-sung Hong & Ki Hong Kim & Chulung Lee, 2017. "Shipment Consolidation Policy under Uncertainty of Customer Order for Sustainable Supply Chain Management," Sustainability, MDPI, vol. 9(9), pages 1-17, September.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:9:p:1675-:d:112546
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    References listed on IDEAS

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    2. Paulo Rita & Ricardo F. Ramos, 2022. "Global Research Trends in Consumer Behavior and Sustainability in E-Commerce: A Bibliometric Analysis of the Knowledge Structure," Sustainability, MDPI, vol. 14(15), pages 1-20, August.

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