Transportation Economics: Inventory Management and Supply Chain

This Cornell Notes is about Transportation Economics and its relation to Inventory Management and Supply Chain. It discusses the importance of sustainability in inventory management, the relations between vendor-managed inventory and supply chain model, the effectiveness of inventory policies for supply chain management, and the connection between transportation risks and costs with inventory models.

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Cornell Notes
Lecture, reading/chapter/novel/article during class, power point, movies (if need to collect info.)
Topic: Transportation Economics
Essential Question:
Questions/Main Ideas:

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Notes:
Q. Why is sustainability very important in the inventory management? (Article 1)
A. Inventory management is considered to be one of the most important things in managing of a
business organization. One of the most important assets in the inventory management is the EOQ
model. The full form of this model is the Economic Order Quantity model. This model has been
studied more than all other models in terms of inventory management (Michalski, 2013). As per
the operations of this model, it is able to identify the optimal lot size. The total amount of the
inventory costs can be reduced to make the business sustainable enough. The use of the transport
can be identified through the utilization of this model in the inventory management as well. The
logistic costs also have a deep impact on the sustainability of the inventory management
(Michalski, 2013)
Q. What are the relations between the vendor-managed inventory and supply chain model?
(Article 3)
A. The two most important sections of the inventory management are the production inventory
and quality control. They are both very much important in the working of the supply chain
management. The entire supply chain system has to incur inspection issues. There may be faults
or errors caused in that process (Khan, Jaber & Ahmad, 2014). There might be one single vendor
and a number of buyers indeed. This would include the proper operations of the supply chain
management. The buyers might be victims of the sampling errors indeed. This would cost a huge
effect in the quality inspection by the companies (Khan, Jaber & Ahmad, 2014)
Q. How can the inventory policies be effective for the supply chain management? (Article 3)

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A. The supply chain management has two variables like the upstream effect and the downstream
effect. The variability is very much increasing in the fields of supply chain management. The
financial assets or the financial performance of the organizations can be lowered of the inventory
costs are hampered in the overall market (Chen, Xue & Yang, 2013). The powerful approaches
should be taken in order to address the situations that arise in the different supply chain models.
The different stakeholders and their relationships with each other has been a large asset in the
supply chain management. The two most useful sections are the raw material suppliers, taken as
the upper nodes and the end customers, taken as the lower nodes. They are the most useful
sections that have a huge say in the costing of inventory management (Chen, Xue & Yang, 2013)
Q. How are transportation risks and costs are connected with the inventory models? (Article 5)
A. The inventory model is very much interconnected with the transportation costs. The
transportation risks and costs are a huge part of the supply chain and logistics management. The
global competition is getting higher and higher with each passing day (Theoharidou, Kandias &
Gritzalis, 2012). Almost all the organizations want to manage their supply chain and logistics
properly. This leads them to manage the costs in transportation as well. The goods have to be
sent to the customers as per the requirements of the customers properly. The good stakeholder
relationship will have to be maintained between the retailers, suppliers and manufacturers.

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References
Chen, Y., Xue, W., & Yang, J. (2013). Optimal inventory policy in the presence of a long-term
supplier and a spot market. Operations Research, 61(1), 88-97.
Khan, M., Jaber, M. Y., & Ahmad, A. R. (2014). An integrated supply chain model with errors in
quality inspection and learning in production. Omega, 42(1), 16-24.
Michalski, G. (2013). Value-based inventory management.
Theoharidou, M., Kandias, M., & Gritzalis, D. (2012). Securing transportation-critical
infrastructures: Trends and perspectives. In Global Security, Safety and Sustainability &
e-Democracy(pp. 171-178). Springer, Berlin, Heidelberg.