A Mathematical Model for a Multi-Commodity, Two-Stage Transportation and Inventory Problem

Authors

  • P Ji The Hong Kong Polytechnic University
  • K J Chen The Hong Kong Polytechnic University
  • Q P Yan Southwest Jiaotong University

DOI:

https://doi.org/10.23055/ijietap.2008.15.3.142

Keywords:

Transportation, inventory, network programming, multi-commodity, rational unit shipping cost

Abstract

This paper presents a mathematical model for two-stage planning of transportation and inventory for many sorts of products (multi-commodity). The situation considered in this paper, which happens in a local furniture manufacturing firm, is that the total supply in origins exceeds the current-stage’s total demand from all destinations (markets). Therefore, the problem is how to arrange the current-stage’s shipping in consideration of next-stage’s (that is, future’s) inventory in both origins and destinations. A mathematical model is proposed for the problem with the objective of minimizing the total cost of both shipping and inventory for all products within two stages. Meanwhile, since the next-stage’s shipping costs usually are unknown, this paper presents a new concept of rational unit shipping cost: a forecasted average cost with weight of next-stage’s shipping amount. Finally, a numerical example extracted from the furniture manufacturing company with 4 origins, 4 destinations and 4 commodities is illustrated in the paper.

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Published

2022-02-25

How to Cite

Ji, P., Chen, K. J., & Yan, Q. P. (2022). A Mathematical Model for a Multi-Commodity, Two-Stage Transportation and Inventory Problem. International Journal of Industrial Engineering: Theory, Applications and Practice, 15(3), 278–285. https://doi.org/10.23055/ijietap.2008.15.3.142

Issue

Section

Supply Chain Management