Transportation costs and inventory management: Why transportation costs matter

Joseph R. Carter, Bruce G. Ferrin

Research output: Contribution to journalArticle

41 Scopus citations

Abstract

In this article, the importance of proper consideration of transportation costs for effective management of purchased component inventory order lot sizes will be explained. First, the advantages to the buyer of controlling inbound transportation will be presented and discussed. Second, past research into the impact of transportation costs on managing production inventories will be reviewed. Finally, an example showing the impact of transportation costs on the order lot size decision will be presented, and a method for properly treating transportation costs in inventory management will be demonstrated.

Original languageEnglish (US)
Pages (from-to)58-61
Number of pages4
JournalProduction and Inventory Management Journal
Volume37
Issue number3
StatePublished - Dec 1 1996

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering

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