Information provided by: Dr. Alfred Guiffrida

Anthony J. Apicello (Operations Management major), Jennifer F. Becka (Operations Management major) and Ran Ding (Finance major) were co-authors on the paper, “A Transportation Based Economic Order Quantity Model”. The paper was presented at the recent International Academy of Business and Economics Conference which was held in Las Vegas on October 18-21. The paper was presented in the Production/Operations Management track of the conference and the paper also appears in the Proceedings of the 2009 International Academy of Business and Economics Conference.

The idea for the paper came about based on classroom discussions on the limitations of current joint inventory-transportation lot sizing decision models which are reported in the literature. These discussions were held during the Spring 2009 M&IS 34064 Manufacturing Resource Planning course in which Anthony, Jennifer and Ran were students. The major contribution of the paper is the integration of real-world transportation costs (as represented by a set of actual transport truck rate tariffs) into the joint inventory-transportation lot sizing decision model. The vast majority of inventory-transportation models assume a constant (and often unrealistic) transportation cost component. The students’ direct contribution in the paper was in the fitting of non-linear regression models to model the transportation freight rate tariffs. They also performed a supporting sensitivity analysis of their fitted model that examined the error bound associated with the model performance.