AN INVESTIGATION OF FREIGHT CONSOLIDATION AND FIELD WAREHOUSING: EFFECTS ON LOGISTICS SYSTEM PERFORMANCE (TRANSPORTATION, DISTRIBUTION MANAGEMENT)

The objective of this research was to conduct a comparative analysis of the effects of freight consolidation and field warehousing on logistics system performance under different system structures and operating conditions. Five system performance variables (transportation cost, order response time, order response time variance, inventory cost, and total cost) were measured to develop managerial guidelines for evaluating the two strategies, thus enabling better control of distribution costs.; Three research questions were identified to address the critical gaps which exist in the current literature, and seven hypotheses were formulated to find answers to those questions. The ANOVA technique was used to test the hypotheses. A hypothetical firm was used to collect the data by simulating the logistics operation under an assumed daily order flow from a market consisting of the 17 western states. A normal distribution was assumed for the order weight, and the order frequency was assumed to be proportional to the population size. Three-digit zip code areas were used to construct 132 order points. Order point and order weight generations were done using the inverse-transform method.; The findings from this research suggest that: (1) for a firm with a small order level from a national market, freight consolidation may not be as effective as field warehousing; (2) when using the freight consolidation technique, it is very important to consider the impact of expedited shipment; and (3) the number of warehouses becomes most critical under the field warehousing strategy from a transportation cost and order response time point of view.; The research suggests that current consolidation practices should be surveyed to discover the emerging innovative trends in logistics that have been encouraged by deregulation, and to point the way to future research.