Influence of shipment size on logistics costs in the ordering company

Johansson, Eva (author): Jönköping University,JTH, Industriell organisation och produktion,JTH. Forskningsområde Industriell organisation och produktion

Heuman, Stefan (author)

Johansson, Mats I (author)

(creator_code:org_t)

Abstract Subject headings

This paper shows the great importance of taking transportation costs into account when deciding on the shipment sizes. During the last few decades companies have tried to reduce their shipment sizes, in order to increase their inventory turnover rates. However, the transportation cost is hardly ever included as an explicit parameter in the shipment size decision. The results from a case study show that it is economically advantageous, in the perspective of the model applied, to increase the shipment sizes for many of the suppliers. These results are discussed together with the factors that act for smaller shipment sizes. One of the final conclusions is, however, that if the manufacturing and the materials flow systems were changed in order to take full advantage of smaller shipment sizes and less material in house, it would possibly be profitable to decrease the shipment sizes even more than has hitherto been done.

About the subject

ENGINEERING AND TECHNOLOGY: ENGINEERING AND ...; and Mechanical Engin ...; and Production Engin ...

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