Allocating cost of service to customers in inventory routing

Title: Allocating cost of service to customers in inventory routing
Creator: Özener, Okan Örsan; Ergun, Özlem; Savelsbergh, Martin
Relation: National Science Foundation.DMI-0427446
Relation: Operations Research Vol. 61, Issue 1, p. 112-125
Publisher Link: http://dx.doi.org/10.1287/opre.1120.1130
Publisher: INFORMS
Resource Type: journal article
Date: 2013
Description: Vendor-managed inventory (VMI) replenishment is a collaboration between a supplier and its customers, where the supplier is responsible for managing the customers' inventory levels. In the VMI setting we consider, the supplier exploits synergies between customers, e.g., their locations, usage rates, and storage capacities, to reduce distribution costs. Due to the intricate interactions between customers, calculating a fair cost-to-serve for each customer is a daunting task. However, cost-to-serve information is useful when marketing to new customers or when revisiting routing and delivery quantity decisions. We design mechanisms for this cost allocation problem and determine their characteristics both analytically and computationally.
Subject: cost allocation; cost-to-serve; vendor-managed inventory; inventory routing problem
Identifier: http://hdl.handle.net/1959.13/1064040
Identifier: uon:17449
Identifier: ISSN:0030-364X
Language: eng
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