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, we present a case study for a company that implemented a break quantity rule. Finally, in the last section the main results are summarised.
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Kleijn, M.J., Dekker, R. (1998). Using break quantities for tactical optimisation in multi-stage distribution systems. In: Fleischmann, B., van Nunen, J.A.E.E., Speranza, M.G., Stähly, P. (eds) Advances in Distribution Logistics. Lecture Notes in Economics and Mathematical Systems, vol 460. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-46865-0_13
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DOI: https://doi.org/10.1007/978-3-642-46865-0_13
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