Investigating the Value of Postponement in Inventory Routing Problems

Saka, Fernando (2009) Investigating the Value of Postponement in Inventory Routing Problems. [Dissertation (University of Nottingham only)] (Unpublished)

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Transportation and inventory management account for a large portion of the costs of distribution companies, so postponing delivery services could result in savings in these expenses.

This particular study focuses on finding the optimal postponement horizon in which both routing and inventory holding costs are minimized. In addition, the research aims to explore the impact of a variety of parameters (service area, depot location, customers demand rate, customers density and vehicle capacity) in the optimal accumulation times and inventory routing costs.

For diverse routing scenarios, several problem instances are created in excel. Results are obtained by using a continuous approximation model. Finally, through a graphical analysis, the key findings about the optimal level of postponement are revealed.

This paper concludes that the optimal level of postponement in inventory routing problems depends on the combination of the problem parameters. Optimal postponement horizons are shorter for cases when the inventory holding costs dominates the routing costs, when the vehicle capacity decreases, when the depot is centrally located, when the customers are located in service regions near the depot and when the customers demand rate is independent. Yet, optimal postponement horizons are larger under reverse conditions.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 09 Aug 2011 10:24
Last Modified: 21 Mar 2022 16:05

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