The decision-making on an in-house logistic division's operation strategies [An article from: International Journal of Production Economics]

This digital document is a journal article from International Journal of Production Economics, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
This paper mathematically proves under which situations a firm should run its in-house logistic division as a cost center, as a profit center, or as an outsourced logistic to 3PL providers. By studying the effects of queuing delays and users' related costs on the decision of a time-sensitive in-house logistics division, this research concludes that to maximize the value of an organization as a whole, the in-house logistics division should work as a deficit center. If operated as a profit center, an in-house logistic division will bring quicker service to its customers, but at a higher price and lower utilization.