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Using break quantities for tactical optimisation in multi-stage distribution systems

  • Marcel J. Kleijn
  • Rommert Dekker
Conference paper
  • 224 Downloads
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 460)

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.

Keywords

Distribution systems Inventory Transportation Marketing break quantity rule 

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Copyright information

© Springer-Verlag Berlin Heidelberg 1998

Authors and Affiliations

  • Marcel J. Kleijn
    • 1
  • Rommert Dekker
    • 1
  1. 1.Erasmus University RotterdamRotterdamThe Netherlands

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