An Inventory model with Haulage Sharing Approach and Line Haul Cost for Freight Transportation

Transportation cost plays an important role in an inventory decision. In this paper we study about the inventory model with haulage sharing approach and line haul cost. Haulage sharing means that the two partners are co-operating in sharing transportation paths and handling units. Many companies of road freight transportation have suffered from performance decline and business distress because of the continual rise of the cost and the long term down term of the freight rate. Due to the lower freight rate and rising cost, the freight transportation companies will lose the strength for improvement and innovation and furthermore may lose the competitiveness and sustainability. Hence, we have computed the line haul cost for the freight transportation. Mathematical model and numerical examples are presented and discussed the proposed model.