This research discusses how to apply the concept of the extra supply chain cost to managing an
operational problem in a transshipment center. We set four scenarios. Scenario 1 is: goods will be sent to the transshipment center until there is no free space. Scenario 2 is: goods will be sent to the transshipment center and a temporary space. Scenario 3 is: Scenario 1 without free space reorganization.
Scenario 4 is: Scenario 2 without free space reorganization. In all the four scenarios, we create an extra supply chain cost equation to validate the results. The extra supply chain cost consists of renting temporary space, transportation, reorganization and returned goods. We used empirical data gathered
from some transshipment centers in central Taiwan to simulate our research problem. In conclusion we show that the larger the transshipment center, the lower the extra cost. The extra cost will be minimized if the transshipment center returns the superfluous goods directly because of high space and
reorganization cost. If the transshipment center is full: first the return of the goods should be considered;secondly, the renting of temporary space should be considered, with the reorganization of space being the final consideration.
Relation:
Asian Journal of Management and Humanity Sciences 1(4):514-522
