Mjg. Vaneijs, MULTIITEM INVENTORY SYSTEMS WITH JOINT ORDERING AND TRANSPORTATION DECISIONS, International journal of production economics, 35(1-3), 1994, pp. 285-292
In many practical situations joint determination of ordering and trans
portation decisions for a family of items may lead to a considerable c
ost saving. In this paper we consider a multi-item inventory system wi
th a freight rate schedule that is a function of the volume shipped an
d the capacity of a standard container. Orders for the family of items
are all triggered by a coordinated periodic (R, S) policy. Economies
of scale exist because of the reduced freight rates when ordering a fu
ll-container load instead of a less-than-container load, A full-contai
ner load can be achieved by enlarging the initial order quantities. A
heuristic is proposed to decide whether an initial order should be enl
arged or not. The heuristic is based on a comparison of the expected s
aved shipping cost, the expected saved ordering cost and the expected
extra holding cost, caused by an enlargement. Some numerical examples
show that the heuristic works quite satisfactorily.