AN INVENTORY-TRANSPORT MODEL WITH UNCERTAIN LOSS AND DAMAGE

This paper develops an inventory-transport model where demand, lead ti me and freight loss and damage are all stochastic. An exact formulatio n, as well as a set of approximations, of a shipper's average logistic s cost are derived. They are tested on numerical examples and the resu lts are discussed in terms of the performance of the approximations, t he impacts of freight loss and damage, and the relationships between l oss and damage control and reductions of the mean and variance of lead time.