Osman Alp, Ulku Gurler and Nasuh Cagdas Buyukkaramikli. Coordinated Logistics: Joint Replenishment with Limited Fleet In-House Transportation for a Supply Chain

Abstract. In this talk, we jointly consider the inventory replenishment and transportation operations in a two echelon supply chain with multiple retailers, where the transportation is undertaken by an in-house fleet of limited size. The retailers operate under a quantity based (Q;S) joint replenishment policy, where a limited fleet of trucks is used to dispatch the orders from the warehouse which employs a one-for-one inventory control policy. The transportation is assumed to take a fixed amount of time. The departure process of the warehouse is characterized in distribution and first two moments, which constitutes the incoming arrivals of transportation unit. The transportation unit is modeled as a E/D/K queuing system. Operating characteristics and the expected cost rate of the whole system are derived and inspected with respect to several system parameters. We also show that the variance of the inter-departure times from the warehouse is at most the variance of the inter-arrival times of orders to the warehouse, exhibiting an almost reverse bullwhip effect. An extensive numerical study is conducted to assess the performance and the sensitivity of the model, which also revealed interesting managerial issues.