Abstract
This paper addresses logistics decisions for an aviation firm and its joint venture in Chengdu, China. The major logistics cost items for outsourcing aircraft engine components to the joint venture are identified and a number of transportation alternatives are examined based on cost effectiveness. Under the current structure of the company’s global supply chain, we have evaluated five transportation options for moving materials inbound and outbound: all air, water-railfull container load, water-rail less than container load, water-truck full container load, and water-truck less than container load. A cost optimization model for each of these transportation modes using shipping quantity as a major decision variable is developed and the associated solution procedure is provided. These models provide useful guidelines for formulating sound transportation policies. Although the evaluation framework is established based on a particular company’s global supply chain, it is applicable for many companies that are practicing global sourcing strategies.
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© 2002 Kluwer Academic Publishers
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Zeng, A.Z. (2002). An Optimization Framework for Evaluating Logistics Costs in a Global Supply Chain: an Application to the Commercial Aviation Industry. In: Geunes, J., Pardalos, P.M., Romeijn, H.E. (eds) Supply Chain Management: Models, Applications, and Research Directions. Applied Optimization, vol 62. Springer, Boston, MA. https://doi.org/10.1007/0-306-48172-3_12
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DOI: https://doi.org/10.1007/0-306-48172-3_12
Publisher Name: Springer, Boston, MA
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