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 language||English (US)|
|Number of pages||4|
|Journal||Production and Inventory Management Journal|
|State||Published - Dec 1 1996|
ASJC Scopus subject areas
- Industrial and Manufacturing Engineering