Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 1997-09-24
Number: 97-094/4
Author-Name: Marcel J. Kleijn
Author-Name: Rommert Dekker
Author-Email: rdekker@few.eur.nl
Author-Workplace-Name: Econometric Institute, Erasmus University Rotterdam
Title: Using Break Quantities for Tactical Optimisation in Multistage Distribution Systems
Abstract: In this chapter we discuss a tactical optimisation problem that arises in a multistage distribution system where customer orders can be delivered from any stockpoint. A simple rule to allocate orders to locations is a break quantity rule, which routes large orders to higher-stage stockpoints and small orders to end-stockpoints. A so-called break quantity determines whether an order is small or large. We present a qualitative discussion on the implications of this rule for the marketing process, and a qualitative and quantitative analysis on the implications for the transportation and inventory costs. Furthermore, wepresent a case study for a company that implemented a break quantity rule. Finally, in the last section the main results are summarised.
Keywords: Distribution systems; inventory; transportation; marketing; break quantity rule
File-Url: https://papers.tinbergen.nl/97094.pdf
File-Format: application/pdf
File-Size: 197334 bytes
Handle: RePEc:tin:wpaper:19970094