The impact of transportation costs on supply chain managemen

Many buyer and supplier contract negotiations ignore the impact of transportation charges on supply chain costs and order sizes. What the field of purchasing has traditionally considered a cooperative relationship between a buyer and supplier cannot possibly optimize supply chain costs without invol...

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Bibliographic Details
Published in:Journal of business logistics 1995-01, Vol.16 (1), p.189
Main Authors: Carter, Joseph R, Ferrin, Bruce G
Format: Article
Language:English
Subjects:
Compromises
Contract negotiations
Cost control
Costs
Heuristic
Logistics
Order quantity
Profitability
Profits
Purchasing
Purchasing contracts
Studies
Suppliers
Supply chain management
Supply chains
Transportation
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Summary:Many buyer and supplier contract negotiations ignore the impact of transportation charges on supply chain costs and order sizes. What the field of purchasing has traditionally considered a cooperative relationship between a buyer and supplier cannot possibly optimize supply chain costs without involvement of the transportation carrier in the process. Trilateral optimality refers to a supply chain where seller, buyer, and carrier costs are explicitly considered in establishing optimal lot sizes. It is proposed that comprises by the buyer, the seller, and the carrier can serve to improve profitability for all parties.
ISSN:0735-3766
2158-1592