Title :
Optimal outbound dispatching policy with pricing
Author :
Hong, Ki-sung ; Lee, Chulung
Author_Institution :
Div. of Inf. Manage. Eng., Korea Univ., South Korea
Abstract :
Under a VMI (Vendor Managed Inventory) system, the vendor holds a certain level of control over not only inbound replenishment decisions on stocking but also outbound re-supply decisions. Hence, vendor faces a better opportunity to synchronize the inventory and transportation decision. While shipment consolidation can reduce the transportation cost, however, delivery time to the customer may increase. Thus, inventory and transportation decision must be coordinated considering both customer service requirement and transportation cost. In this study, we have developed a optimal outbound dispatch policy to maximize profits under a quantity based dispatching policy. A mathematical model is developed and an efficient algorithm is provided to obtain the optimal parameters for the proposed policy.
Keywords :
customer services; goods distribution; inventory management; pricing; transportation; customer service requirement; inbound replenishment decisions; inventory decision; mathematical model; optimal outbound dispatch policy; optimal outbound dispatching policy; outbound resupply decisions; pricing; quantity based dispatching policy; shipment consolidation; transportation cost; transportation decision; vendor managed inventory system; Costs; Dispatching; Information management; Inventory management; Marine vehicles; Mathematical model; Pricing; Supply chains; Timing; Transportation; Pricing; linear demand function; shipment consolidation;
Conference_Titel :
Industrial Engineering and Engineering Management, 2008. IEEM 2008. IEEE International Conference on
Conference_Location :
Singapore
Print_ISBN :
978-1-4244-2629-4
Electronic_ISBN :
978-1-4244-2630-0
DOI :
10.1109/IEEM.2008.4738148