CAREER: Coordination of Transportation and Inventory Decision - Premises, Models, and Justification

Texas A&M Engineering Experiment Station, College Station TX

Investigators

Abstract

This Faculty Early Career Development (CAREER) grant provides funding for an investigation of the latest industrial trends in integrated logistical management. The major concentration is on recent supply chain initiatives enabling the integration of transportation and inventory decisions. The specific initiatives of interest include Vendor Managed Inventory (VMI), Third Party Warehousing/Distribution (3PW/D), and Time Definite Delivery (TDD) applications. Under these initiatives, substantial savings are realizable by carefully incorporating a shipment strategy with inventory replenishment decisions. The impact is particularly tangible when the shipment strategy calls for a consolidation program where several smaller deliveries are dispatched as a combined load realizing the scale economies inherent in transportation. Recognizing a need for analytical research in the field, this project concentrates on analysis of integrated policies where shipment consolidation and inventory control decisions are coordinated under VMI, 3PW/D, and TDD agreements. The research objective is to develop a modeling framework and theoretical understanding of integration issues in the context of these supply chain initiatives. The goal is to address the question of under what conditions integration works and to render insights into distribution policy design and operational control. The research agenda of this career plan has been developed in collaboration with industry. Hence, if successful, the results will provide a better understanding of real-life integration problems in supply chain practices. On the educational side, in response to a growing demand for a new generation of logistics engineers, this career plan builds on industrial collaboration. In partnership with industry, new educational materials and courses that unify the practice and theory of integrated logistics will be developed, and new student projects will be designed to satisfy the needs of students in pursuit of careers in this emerging field.