Integrated procurement and transportation planning for purchased components: a case study

Yanık, Hatice Deniz
This study is about an integrated procurement and transportation planning system for purchased components of a consumer-durables manufacturer. Due to transportation cost structures and demand characteristics our problem can be classified as a variant of the dynamic-demand joint replenishment problem. The problem is to determine the replenishment policy using the advantages of coordinated transportation of items that will minimize the sum of total inventory holding and tranportation costs over a finite planning horizon. A mathematical model is formulated for purchasing and transportation decisions for the purchased items using the advantage of joint transportation costs. A two-phased solution method is proposed in order to obtain a “good solution” for the problem. The proposed solution method is compared with the current practice for different problem instances using retrospective data and created data. As a result it is shown that proposed method decrease the total inventory and transportation cost of the system even though the first aggregate problem can not be solved to optimality.


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Citation Formats
H. D. Yanık, “Integrated procurement and transportation planning for purchased components: a case study,” M.S. - Master of Science, Middle East Technical University, 2008.