Integrated Lead Time and Demand Risk Pooling Strategies in Multi-Echelon Distribution Systems

In this research, we first examine the impact of including quantity discounts on purchasing price in an order splitting system. Second, we try to understand how the integration of the order splitting and consolidated distribution strategies influences the total logistic cost. The results show that the integrated strategy works well in many cases if the total annual cost includes the transportation costs as well as the quantity discount in purchasing price.