Economical delivery strategies of products in a JIT system under a global supply chain

Abstract

This study supplies an optimal total cost model, including approach I and approach II, to manufacturers with several assemblers in the same area to decide the most economical product delivery strategy in the global just-in-time (JIT) system. In approach II, manufacturers deliver products to downstream assemblers via a JIT system with third party logistics (3PL) support. There is a distinction between approach I and approach II according to whether or not the delivery quantity is limited to economical delivery lot size. A case study analysis is used to illustrate the proposed models, in which the following conclusions can be obtained. Firstly, the JIT product delivery strategy according to economical delivery lot size can be obtained to achieve a cost-effective global supply chain. Second, upstream manufacturers can apply a JIT system under a global supply chain to downstream manufacturers with lower cost through support from 3PL with economical delivery lot size.