Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/44030
Title: Effective zero-inventory-ordering policies for the single-warehouse multiretailer problem with piecewise linear cost structures
Authors: Chan, L.M.A.
Muriel, A.
Shen, Z.-J.M.
Simchi-Levi, D.
Teo, C.-P. 
Keywords: Approximation algorithms
Inventory
Less than truckload (LTL)
Tranportation
Truckload (TL)
Zero-invertory-ordering policies
Issue Date: 2002
Source: Chan, L.M.A.,Muriel, A.,Shen, Z.-J.M.,Simchi-Levi, D.,Teo, C.-P. (2002). Effective zero-inventory-ordering policies for the single-warehouse multiretailer problem with piecewise linear cost structures. Management Science 48 (11) : 1446-1460. ScholarBank@NUS Repository.
Abstract: We analyze the problem faced by companies that rely on TL (Truckload) and LTL (Less than Truckload) carriers for the distribution of products across their supply chain. Our goal is to design simple inventory policies and transportation strategies to satisfy time-varying demands over a finite horizon, while minimizing systemwide cost by taking advantage of quantity discounts in the transportation cost structures. For this purpose, we study the cost effectiveness of restricting the inventory policies to the class of zero-inventory-ordering (ZIO) policies in a single-warehouse multiretailer scenario in which the warehouse serves as a cross-dock facility. In particular, we demonstrate that there exists a ZIO inventory policy whose total inventory and transportation cost is no more than 4/3 (5.6/4.6 if transportation costs are stationary) times the optimal cost. However, finding the best ZIO policy is an NP-hard problem as well. Thus, we propose two algorithms to find an effective ZIO policy: An exact algorithm whose running time is polynomial for any fixed number of retailers, and a linear-programming-based heuristic whose effectiveness is demonstrated in a series of computational experiments. Finally, we extend the worst-case results developed in this paper to systems in which the warehouse does hold inventory.
Source Title: Management Science
URI: http://scholarbank.nus.edu.sg/handle/10635/44030
ISSN: 00251909
Appears in Collections:Staff Publications

Show full item record
Files in This Item:
There are no files associated with this item.

Page view(s)

73
checked on Dec 7, 2017

Google ScholarTM

Check


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.