×

Analysis of third-party warehousing contracts with commitments. (English) Zbl 0994.90085

Summary: This paper considers multi-period warehousing contracts under random space demand. A typical contract is specified by a starting space commitment plus a certain number of times at which the commitment can be further modified. Three forms of contracts are analyzed: (1) there is a restriction on the range of commitment changes and the schedule for the changes is preset by the warehouser; (2) the same as form (1) but there is no restriction on the range; (3) the same as form (2) but the schedule for the changes is chosen by the user. We explore properties and algorithms for the three problems from the user’s perspective. Solutions of simple form are obtained for the first two models and an efficient dynamic programming procedure is proposed for the last. A numerical comparison of the total expected leasing costs suggests that under certain demand patterns, contract forms (2) and (3) could be cost effective.

MSC:

90B60 Marketing, advertising
90C39 Dynamic programming
90B06 Transportation, logistics and supply chain management
91B70 Stochastic models in economics
PDFBibTeX XMLCite
Full Text: DOI

References:

[1] Y. Bassok, R. Anupindi, Analysis of supply contracts with commitment and flexibility, Working Paper, J.L. Kellogg Graduate School of Management, Northwestern University, Evanston, IL, 1998; Y. Bassok, R. Anupindi, Analysis of supply contracts with commitment and flexibility, Working Paper, J.L. Kellogg Graduate School of Management, Northwestern University, Evanston, IL, 1998 · Zbl 1209.90014
[2] Copacino, W. C., Supply Chain Management: The Basics and Beyond (1997), St. Lucie Press: St. Lucie Press Boca Raton, FL · Zbl 1056.90500
[3] Cormier, G.; Gunn, E. A., A review of warehouse models, European Journal of Operational Research, 58, 3-13 (1992)
[4] S.H. Hum, E.-E. Ngoh, Third-party warehousing contracts: Mathematical modeling and analytical implications, Working Paper, Faculty of Business Administration, National University of Singapore, 1997; S.H. Hum, E.-E. Ngoh, Third-party warehousing contracts: Mathematical modeling and analytical implications, Working Paper, Faculty of Business Administration, National University of Singapore, 1997
[5] Lowe, T. J.; Francis, R. L.; Reinhardt, E. W., A greedy network flow algorithm for a warehouse leasing problem, AIIE Transactions, 11, 170-182 (1979)
[6] J.H. McAdam, Logistics outsourcing: Who not? Business Wire, 7 July 1997; J.H. McAdam, Logistics outsourcing: Who not? Business Wire, 7 July 1997
[7] Ross, S. M., Stochastic Processes (1983), Wiley: Wiley New York · Zbl 0555.60002
[8] Tsay, A. A., The quantity flexibility contracts and supplier-customer incentitives, Management Science, 45, 1339-1358 (1999) · Zbl 1231.90065
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.