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Three Extensions to the Inventory Theoretic Approach: A Transportation Selection Model, A Discrete Event Simulation of the Inventory Theoretic Approach, Postponement from an Inventory Theoretic Perspective

Sandlin, Doral Edward

Abstract Details

2010, Doctor of Philosophy, Ohio State University, Business Administration.

This research attempts to extend the inventory theoretic approach in three stand-alone papers. The first chapter introduces the inventory theoretic approach and gives a brief overview of the remaining chapters. Chapter two develops an optimization model based on the inventory theoretic approach in an effort to aide managers in selecting the best carrier/mode for their product. Findings suggest that total logistics costs are minimized by selecting a faster mode of transportation as the value of the product and the coefficient of variation in demand increase. The model extends the existing state of the art in the inventory theoretic transportation selection literature by precluding the need for conducting multiple experiments among all available transportation options.

Chapter three uses the inventory theoretic approach in a discrete event simulation in an effort to investigate the accuracy of the numerical approach in estimating total logistics costs and rank-ordering the best to worst carriers. Empirical data for this study are gathered from a company that uses a portfolio of carriers to ship product world-wide. Findings suggest that the numerical approach used in the inventory theoretic approach is robust for selecting the best carriers. In addition, carrier schedules were found to have an impact on which carrier provides the lowest total logistics cost. Finally, delays such as equipment shortages, ordering errors, and carrier overbooking were quantified. The results suggest that delays should be tracked by shippers, because an excessive number of delays by a carrier can impact the rank-ordering of carriers.

Chapter four extends the inventory theoretic approach to the postponement literature stream. A review of the postponement literature found that transportation uncertainty is largely ignored, lacks examples of an (s, Q) inventory model, and generally ignores the cost of in-transit stock, which is considered here. The fourth chapter also explores the concept of postponement as it relates to product life cycles. Empirical data for chapter four were gathered from a Global 500 Company. Results from this essay suggest that ignoring transportation uncertainty can underestimate the cost of using postponement and lead to the selection of a supply chain strategy that is more expensive. Other findings suggest that postponement strategies can be used for products with long product life cycles to reduce the total cost of a product. This is occurs for both products in the introduction/growth stage of the product life cycle as well as products at the mature/decline stage. Finally, this research suggests that fluctuations in currency exchange rates can be mitigated by use of an assemble-to-order strategy.

Martha Cooper, PhD (Committee Chair)
Keely Croxton, PhD (Committee Member)
Alan Johnson, PhD (Committee Member)
John Saldanha, PhD (Committee Member)
Walter Zinn, PhD (Committee Member)
170 p.

Recommended Citations

Citations

  • Sandlin, D. E. (2010). Three Extensions to the Inventory Theoretic Approach: A Transportation Selection Model, A Discrete Event Simulation of the Inventory Theoretic Approach, Postponement from an Inventory Theoretic Perspective [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1261554936

    APA Style (7th edition)

  • Sandlin, Doral. Three Extensions to the Inventory Theoretic Approach: A Transportation Selection Model, A Discrete Event Simulation of the Inventory Theoretic Approach, Postponement from an Inventory Theoretic Perspective. 2010. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1261554936.

    MLA Style (8th edition)

  • Sandlin, Doral. "Three Extensions to the Inventory Theoretic Approach: A Transportation Selection Model, A Discrete Event Simulation of the Inventory Theoretic Approach, Postponement from an Inventory Theoretic Perspective." Doctoral dissertation, Ohio State University, 2010. http://rave.ohiolink.edu/etdc/view?acc_num=osu1261554936

    Chicago Manual of Style (17th edition)