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Economic order quantity in a centralized two-level supply chain with transportation cost

Baboli, A ; Sharif University of Technology | 2006

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  1. Type of Document: Article
  2. DOI: 10.1109/ICSSSM.2006.320619
  3. Publisher: IEEE Computer Society , 2006
  4. Abstract:
  5. This paper considers a two-level supply chain consisting of one warehouse and one retailer. Unlike the most similar models which determine the optimal ordering policy according to inventory cost only, in this model, we also consider the transportation cost. We assume that the demand rate at the retailer is known and the demand is confined to a single item. Shortages are allowed neither at the retailer nor at the warehouse. The objective is to find the economic order quantities for both the retailer and the warehouse which minimize the total cost. That is. the sum of the holding and ordering cost at the retailer and warehouse as well as the transportation cost from warehouse to retailer. Numerical results show savings can be made by this model in comparison to the model of optimal ordering policy in which the transportation cost is not considered. © 2006 IEEE
  6. Keywords:
  7. Economic analysis ; Numerical analysis ; Retail stores ; Transportation ; Economic order quantity ; Optimal ordering ; Transportation cost ; Supply chains
  8. Source: ICSSSM'06: 2006 International Conference on Service Systems and Service Management, Troyes, 25 October 2006 through 27 October 2006 ; Volume 1 , 2006 , Pages 240-245 ; 1424404517 (ISBN); 9781424404513 (ISBN)
  9. URL: https://ieeexplore.ieee.org/document/4114439