| Shipment consolidation refers to the active intervention by management to combine many small shipments into fewer, larger loads. These larger loads benefit from reduced per-unit transportation cost, faster and more direct transportation, and improved employee and equipment utilization.;We seek to provide a better understanding of the interaction of the basic components of a consolidation program. We first give an overview of shipment consolidation, including types, benefits, disadvantages, and prerequisites of this strategy. The related literature also is critiqued.;Our research focuses on the question, "When should customer orders be dispatched as a consolidated load?" There are three commonly-used shipment-release policies: (a) time policy, where each order is dispatched at a pre-determined date; (b) quantity policy, where all orders are held until a minimum consolidated weight is reached; and (c) time-and-quantity policy, where all orders are held until a predetermined time, unless a minimum weight or volume is accumulated first. We examine the implications of these policies on mean per-unit cost and mean order delay of a consolidation program via computer simulation.;After selecting a shipment-release policy, values for policy parameters must be determined. We discuss two types of analytical methods for determining when consolidated loads should be released. Non-sequential approaches treat the shipment-release question as a "one-time" decision. The following non-sequential approaches are examined: simple rules of thumb and heuristics, the economic shipment quantity concept, stochastic analysis of order characteristics, bulk-service queueing models, and stochastic clearing systems.;Shipment consolidation has received serious academic attention only in the last ten years. Published research generally has examined the effect on distribution costs and delivery time performance of varying consolidation parameters. Determination of practical decision rules for a consolidation program is lacking.;Sequential approaches make the shipment-release decision whenever an order arrives. Sequential approaches discussed in the thesis include marginal analysis and Markov decision processes.;Further research topics relating to shipment consolidation are identified. Appendices include a glossary of physical distribution terms and a discussion on modeling shipper distribution costs. |
