5 - Inventory Theory and Freight Transport Modelling

Abstract

Inventory theory is concerned with the optimal operation of production, logistics, transport, etc. It can prove particularly useful to freight transport modelling. Indeed, analysing inventory theoretic models from a microeconomic perspective explains a lot about the preferences of shippers regarding freight transport. This chapter reminds some simple models from inventory theory, including the fundamental economic order quantity model of optimal shipment size. Then, the theoretical consequences of these models on freight transport economics and demand modelling are examined. Investigating potential synergies between inventory theory and freight transport modelling requires specific databases; the few available surveys are briefly presented. Afterwards, the empirical impact of integrating concepts from inventory theory in freight modelling practice is discussed on the basis of a number of recent studies, which focused mainly on mode choice, or joint choice of mode and shipment size. The chapter concludes on future research directions and challenges.