Abstract
This research studies the logistics and inventory planning problem encountered at an oilfield services company whose supply chain consists of suppliers, a Hybrid Cross-Dock (HCD) facility, and production facilities. The HCD provides an option for the company to store inventory for a period of time without incurring inventory holding costs. This research aims to provide solutions that minimizes the total logistics and inventory-related costs, and obtain several managerial insights. The investigation into the computational complexity shows that the problem is NP-hard. Hence, an efficient bin-packing based heuristic is developed to provide good solutions. Furthermore, to account for the demand uncertainty, we develop an effective rolling horizon operating policy. Besides the proposed heuristics, the research also provides insights into the effects of free storage time at the HCD, which can guide the managers in their interactions and negotiations with an HCD operator. We also show that the length of free storage time at the HCD affects the outbound shipment sizes.
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