Supply Chain Planning Models

Abstract

In the last decade, many companies have recognized that important cost savings and improved service levels can be achieved by effectively integrating production plans, inventory control, and transportation policies throughout their supply chains. The focus of this chapter is on planning models that integrate decisions across the supply chain for companies that rely on third-party carriers. These models are motivated in part by the great development and growth of many competing transportation modes, mainly as a consequence of deregulation of the transportation industry. This has led to a significant decrease in transportation costs charged by third-party distributors and, therefore, to an ever-growing number of companies that rely on third-party carriers for the transportation of their goods.