Vehicle selection model with respect to Economic Order Quantity

Abstract

The matter of vehicle selection, optimizing the order quantity or optimizing logistics costs is extensively discussed in both Polish and foreign literature. In numerous publications, the necessity of decision making in transport or in other related areas with respect to total logistics costs is addressed. Nevertheless, problems arising from the effect of vehicle selection on Economic Order Quantity (EOQ), while fully taking into account transport costs, fails to be mentioned. This paper presents a decision-making model for transport selection taking into consideration total logistics costs and a newly obtained formula for the economic order quantity which separates transport costs into fixed costs, variable costs dependent on the driving distance and operation time, as well as other variable costs. Analyses pertaining to the impact of cargo value and volumetric weight on vehicle selection and on Economic Order Quantity are also conducted.