Integrated inventory replenishment and temporal shipment consolidation : A comparison of quantity-based and time-based models

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)197-210
Journal / PublicationAnnals of Operations Research
Issue number1
Publication statusPublished - Jan 2005
Externally publishedYes


In this paper we present two models for joint stock replenishment and shipment consolidation decisions which arise in the context of vendor managed inventory. Stock replenishment from suppliers or shipment to customers each incurs a lump-sum cost to the vendor. We assume the vendor uses the reorder point, lot-size policy to replenish stock and one of two schemes to dispatch shipment: the time-based and quantity-based consolidation schemes. Under the time-based (quantity-based) scheme, a shipment is dispatched periodically (when a certain quantity of outstanding demand is accumulated). The basic finding is that the quantity-based scheme can outperform the time-based counterpart while the reverse never occurs. © 2005 Springer Science + Business Media, Inc.

Research Area(s)

  • Inventory control, Inventory replenishment and shipment, Temporal shipment consolidation