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Abstract

In today's ever-changing markets, maintaining an effective and adaptable supply chain is essential for any organisation, especially in view of the current business environment's uncertainty and the continuously changing and rising demands of customers. Supply chains have always been susceptible to disruptions. Demand fluctuations is one of the main uncertainty factors in today’s business world. Demand uncertainty can cause frequent changes in production plan which can lead to the increase of instability in the production and distribution system, and result in a surplus or deficiency in inventories and resources. (Inman and Gonsalvez, 1997; Metters and Vargas, 1999). Frequently revising plans and making extra efforts to deal with system uncertainties cause anxiety/nervousness in production environments. (Lee et al., 1997) To deal with this nervousness, various strategies and models have been created for production planning. Previous studies show that strategies like frozen horizon (Kadipasaoglu and Sridharan,1995) , lot sizing techniques (Zhao et al., 2001), forecasting beyond the planning horizon (Blackburn et al., 1986), flexible requirement profile (Srinivasan, 2005) can be applied to minimize the plan instability (nervousness). Literature shows that nervousness/stability has been addressed for production planning but not many models are available for transportation/warehouse planning. While traditional warehouse resource and transportation planning methods focus on cost minimization, they do not seem to provide a formal means to manage plan stability along with cost. In this study, we aim to close this research gap by developing a new Warehouse Resource and Transportation Planning (WRTP) model that considers plan stability, incorporating the Flexible Requirements Profile (FRP) technique called here the WRTP-FRP. The proposed WRTP-FRP is compared to a traditional WRTP as a baseline that minimizes cost without the consideration of stability, using numerical experiments based on cost and stability performances. Keywords: Warehouse Planning, Transportation Planning, Plan Stability, Plan Nervousness, Flexible Requirements Profile (FRP).

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