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Transportation’s role in the sole‐ versus dual‐sourcing decision

John E. Tyworth (Department of Business Logistics, The Smeal College of Business Administration, The Pennsylvania State University, Pennsylvania, USA, and)
Alex Ruiz‐Torres (Department of Management and Decision Sciences, Florida Gulf Coast University, Florida, USA)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Article publication date: 1 March 2000

Abstract

Current studies indicate that buyers can improve lead‐time performance and reduce total inventory‐system costs by splitting orders between two suppliers. These studies, however, treat transportation only implicitly as an element of the cost of placing an order. This is an important limitation, because shipping costs increase disproportionately as the size of shipment decreases and typically comprise a sizeable portion of total logistics cost. Investigates the role of transportation in the decision to procure from either one or two suppliers. A state‐of‐the art model was first modified to treat transportation costs explicitly and then used to conduct 54 experiments to measure the gains or losses in total logistics costs under a variety of representative conditions.

Keywords

Citation

Tyworth, J.E. and Ruiz‐Torres, A. (2000), "Transportation’s role in the sole‐ versus dual‐sourcing decision", International Journal of Physical Distribution & Logistics Management, Vol. 30 No. 2, pp. 128-144. https://doi.org/10.1108/09600030010318847

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MCB UP Ltd

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