Abstract
In this article we address specific inventory management decisions with transportation cost consideration in a multi-level environment consisting of a supplier–warehouse–retailers. We develop two models – namely, decentralized ordering model and centralized ordering model to investigate the effect of collective ordering by retailers on the total inventory cost of the system. A numerical study shows that the proposed model is robust and generates reasonable cost savings. The models have potential in several multi-level applications such as fresh or frozen food delivery to stores of different supermarkets or the supply of medicine to a number of hospitals from a wholesaler.
Original language | English |
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Pages (from-to) | 719-734 |
Journal | Transportation Research Part E: Logistics and Transportation Review |
Volume | 46 |
Issue number | 5 |
Publication status | Published - 2010 |