The impact of lead time reliability in freight transport: A logistics assessment of transport economics findings

W.E.H. Dullaert, L. Zamparini

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper considers speed and reliability, measured by the average and variance of the lead time, to examine the relevance of the latter variable on inventory costs. By using a flexible simulation framework, it is shown that reducing variability does not necessarily reduce costs and might in fact increase the costs of safety stock, depending on the shape of the demand distribution during lead time and the targeted service level. This offers a novel explanation for the wide variety of value of reliability figures obtained in empirical transport economics research. © 2012 Elsevier Ltd.
Original languageEnglish
Pages (from-to)190-200
Number of pages19
JournalTransportation Research. Part E, Logistics and Transportation Review
Volume49
Issue number1
DOIs
Publication statusPublished - 2013

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