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Title: Analysis of third-party warehousing contracts with commitments
Authors: Chen, F.Y. 
Hum, S.H. 
Sun, J. 
Keywords: Dynamic programming
Stochastic processes
Third-party logistics
Warehousing contracts
Issue Date: 2001
Citation: Chen, F.Y., Hum, S.H., Sun, J. (2001). Analysis of third-party warehousing contracts with commitments. European Journal of Operational Research 131 (3) : 603-610. ScholarBank@NUS Repository.
Abstract: This paper considers multi-period warehousing contracts under random space demand. A typical contract is specified by a starting space commitment plus a certain number of times at which the commitment can be further modified. Three forms of contracts are analysed: (1) there is a restriction on the range of commitment changes and the schedule for the changes is preset by the warehouser; (2) the same as form (1) but there is no restriction on the range; (3) the same as form (2) but the schedule for the changes is chosen by the user. We explore properties and algorithms for the three problems from the user's perspective. Solutions of simple form are obtained for the first two models and an efficient dynamic programming (DP) procedure is proposed for the last. A numerical comparison of the total expected leasing costs suggests that under certain demand patterns, contract forms (2) and (3) could be cost effective. © 2001 Elsevier Science B.V.
Source Title: European Journal of Operational Research
ISSN: 03772217
DOI: 10.1016/S0377-2217(00)00102-8
Appears in Collections:Staff Publications

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