Addresses a number of issues relating to determining whetherproducts should be ordered independently and therefore shipped as asingleproduct order, or coordinated and shipped as a group, ormultiproduct, order from a single source. Factors which might influencethe decision include the level or volume of demand, the distribution ofdemand across products, the weight of items and the attractiveness ofthe quantity discount offered. Uses an optimal inventorytheoreticmodel, that incorporates transport weight breaks and quantity discounts,to assess when product orders should be combined and what productsshould be ordered separately. The effects of these decisions on theorder interval, the number of order groupings, the proportion of itemsordered independently, the proportion of attractive discounts forgone infavour of consolidation, and the relative cost savings, are examinedusing an extensive set of simulated data that are based on a firm in theautomobile industry supply chain.
International Journal of Physical Distribution & Logistics Management – Emerald Publishing
Published: Sep 1, 1992