Selection of pallet management strategies from the perspective of supply chain cost with Anylogic software.

Abstract

Pallet is a very important innovation in logistics industry. Pallets are so widely used that we can find them in nearly every logistical operation scenario. In order to manage pallets efficiently, researchers have developed several pallet management strategies (PMS). The most common and widely accepted PMS includes extensive management of pallets (EMP), transfer of pallet's ownership (TPO), and pallet rent (PR). This paper addresses mainly on how to help pallet managers choose a certain kind of PMS from the perspective of supply chain cost. Firstly, cost models of three kinds of PMS are presented. Secondly, all parameters involved in the models are valued based on data that is collected from industry survey. The results show that the cost of PR is constantly lower than EMP, and also lower than TPO when the operation period is no more than 37 months. Finally, the effect of several important parameters on the cost is studied by sensitivity analysis. The selection strategies of PMS are proposed based on the results.