THE INVENTORY THEORTETIC APPROACH IN TRANSPORTATION SELECTION MODELS: A CRITICAL REVIEW

The inventory theoretic approach represents the mainstream framework for building models that try to evaluate transportation-inventory decisions jointly from a total logistics cost perspective. This paper reviews that framework, focusing on the limitations of the standard pattern of implementation in stochastic transportation selection models. Although the approximate solutions of existing models might offer better results than the methods currently in use, the logistics profession is far from the ultimate model. Recommendations are given for improving the resolution, flexibility, and cost-effectiveness of these models.