Multi-echelon inventory systems with shipment consolidation : methods for exact analysis and optimization
(2025)- Abstract
- Efforts to reduce greenhouse gas emissions, globalized markets with intense competition, and generally rising transportation costs emphasize the importance of achieving economically and environmentally sustainable distribution systems. Many international organizations predict that if no new measures are implemented, global carbon dioxide emissions from freight transport will increase to even higher levels. We cannot afford to wait until new green technology solves the problem for us; we need to start doing what we can with what we have. Increasing the load factor of transport vehicles through freight consolidation, better transport planning, and coordination within the supply chain are therefore important measures in the near term. It is... (More)
- Efforts to reduce greenhouse gas emissions, globalized markets with intense competition, and generally rising transportation costs emphasize the importance of achieving economically and environmentally sustainable distribution systems. Many international organizations predict that if no new measures are implemented, global carbon dioxide emissions from freight transport will increase to even higher levels. We cannot afford to wait until new green technology solves the problem for us; we need to start doing what we can with what we have. Increasing the load factor of transport vehicles through freight consolidation, better transport planning, and coordination within the supply chain are therefore important measures in the near term. It is estimated that such improved planning and management could reduce emissions from freight transport by up to one-third.
Thus, there is a significant potential to utilize transport vehicles more effectively and increase load factors through consolidation and joint freight transport, thereby reducing transportation costs and the environmental footprint. At the same time, increased freight consolidation leads to longer lead times and, consequently, higher inventory holding costs to maintain the same customer service levels. To achieve economically and environmentally sustainable solutions, it is therefore essential to have quantitative methods that can balance inventory and shipment consolidation decisions against each other.
This thesis highlights the importance of such methods for achieving more sustainable and cost-effective distribution systems. The developed methods set the stage for practitioners to evaluate alternative replenishment and shipment policies, revealing insights for balancing cost, service, and environmental objectives in multi-echelon inventory and distribution systems under uncertain demand.
In a series of four scientific papers, we analyze centralized One-Warehouse-Multiple-Retailer (OWMR) systems in which non-identical retailers face stochastic demand. For each study, we develop exact analytical methods to obtain the steady-state probability distributions of inventory levels under continuous review replenishment policies, combined with different shipment consolidation strategies. These probabilities are used to evaluate and optimize expected costs, fill rates, and transport-related emissions. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/29dcf446-2b79-4ff5-b4a8-c5a99755515d
- author
- Malmberg, Filip LU
- supervisor
-
- Johan Marklund LU
- Peter Berling LU
- Fredrik Olsson LU
- opponent
-
- Prof. van Jaarsveld, Willem, Eindhoven University of Technology, The Netherlands.
- organization
- publishing date
- 2025
- type
- Thesis
- publication status
- published
- subject
- keywords
- inventory, inventory management, inventory control, multi-echelon, one-warehouse-multiple-retailer systems, shipment consolidation, delivery policy, stochastic, probability
- pages
- 242 pages
- publisher
- Department of Industrial and Mechanical Sciences
- defense location
- Lecture Hall M:E, building M, Ole Römers väg 1F, Faculty of Engineering LTH, Lund University, Lund.
- defense date
- 2025-09-26 10:15:00
- ISBN
- 978-91-8104-615-1
- 978-91-8104-614-4
- language
- English
- LU publication?
- yes
- id
- 29dcf446-2b79-4ff5-b4a8-c5a99755515d
- date added to LUP
- 2025-09-01 22:44:43
- date last changed
- 2025-09-04 14:12:14
@phdthesis{29dcf446-2b79-4ff5-b4a8-c5a99755515d,
abstract = {{Efforts to reduce greenhouse gas emissions, globalized markets with intense competition, and generally rising transportation costs emphasize the importance of achieving economically and environmentally sustainable distribution systems. Many international organizations predict that if no new measures are implemented, global carbon dioxide emissions from freight transport will increase to even higher levels. We cannot afford to wait until new green technology solves the problem for us; we need to start doing what we can with what we have. Increasing the load factor of transport vehicles through freight consolidation, better transport planning, and coordination within the supply chain are therefore important measures in the near term. It is estimated that such improved planning and management could reduce emissions from freight transport by up to one-third.<br/><br/>Thus, there is a significant potential to utilize transport vehicles more effectively and increase load factors through consolidation and joint freight transport, thereby reducing transportation costs and the environmental footprint. At the same time, increased freight consolidation leads to longer lead times and, consequently, higher inventory holding costs to maintain the same customer service levels. To achieve economically and environmentally sustainable solutions, it is therefore essential to have quantitative methods that can balance inventory and shipment consolidation decisions against each other. <br/><br/>This thesis highlights the importance of such methods for achieving more sustainable and cost-effective distribution systems. The developed methods set the stage for practitioners to evaluate alternative replenishment and shipment policies, revealing insights for balancing cost, service, and environmental objectives in multi-echelon inventory and distribution systems under uncertain demand.<br/><br/>In a series of four scientific papers, we analyze centralized One-Warehouse-Multiple-Retailer (OWMR) systems in which non-identical retailers face stochastic demand. For each study, we develop exact analytical methods to obtain the steady-state probability distributions of inventory levels under continuous review replenishment policies, combined with different shipment consolidation strategies. These probabilities are used to evaluate and optimize expected costs, fill rates, and transport-related emissions.}},
author = {{Malmberg, Filip}},
isbn = {{978-91-8104-615-1}},
keywords = {{inventory; inventory management; inventory control; multi-echelon; one-warehouse-multiple-retailer systems; shipment consolidation; delivery policy; stochastic; probability}},
language = {{eng}},
publisher = {{Department of Industrial and Mechanical Sciences}},
school = {{Lund University}},
title = {{Multi-echelon inventory systems with shipment consolidation : methods for exact analysis and optimization}},
url = {{https://lup.lub.lu.se/search/files/226781394/Avhandling_Filip_M_LUCRIS.pdf}},
year = {{2025}},
}