ASSESSING THE IMPACT OF CONSOLIDATION ON INBOUND VENDOR TRAFFIC

The Defense Logistics Agency annually receives at its six major supply depots approximately 650,000 shipments representing some 250 million pounds. This paper proposes a set on consolidation points which will collect these inbound shipments, build truckload lots, and ship them to the depots under lower, government-negotiated rates. The consoliation points are selected by minimizing the volume-weighted distances from the vendors to the points. Cost savings from the net reduction in transportation costs are derived, and advantages and disadvantages are discussed.