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Title: Design and evaluation of an integrated inventory and transportation system
Authors: Chen, ZN
Lee, CKM 
Ip, WH 
Keywords: customer demands
economic order quantity model
integrated inventory and transportation system
non-linear integrated programing
probability distribution
Issue Date: 2012
Publisher: Taylor & Francis Ltd
Source: Transportation planning and technology, 2012, v. 35, no. 4, p. 491-507 How to cite?
Journal: Transportation Planning and Technology 
Abstract: This paper proposes the adoption of an integrated inventory and transportation system (IITS) to minimize the total costs of inventory and transportation. A non-linear programing is developed by analyzing transportation and inventory costs with one supplier and many retailers in the distribution environment. The paper compares the proposed model with the traditional approach in computing total costs with numerical data. The results indicate that the total costs can be optimized by adopting integrated programing rather than the traditional approach, along with achieving improved customer service levels. In particular, sensitivity analysis is applied to determine the performance of the IITS under various transportation costs, holding costs and shortage costs. It shows that the transportation cost per unit is most sensitive in the proposed model. In this situation, the IITS is more effective for cost saving when set-up cost, holding and shortage costs are high, but is less effective for situations involving high per-unit transportation costs.
DOI: 10.1080/03081060.2012.680821
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