Using break quantities for tactical optimisation in multistage distribution systems
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, we present a case study for a company that implemented a break quantity rule. Finally, in the last section the main results are summarised.
|Keywords||break quantity rule, distribution systems, inventory, marketing, transportation|
Kleijn, M.J., & Dekker, R.. (1997). Using break quantities for tactical optimisation in multistage distribution systems (No. EI 9737/A). Retrieved from http://hdl.handle.net/1765/1404