The forward positioning of strategic inventory in the supply chain has an impact on transportation times and is important for sensitive demand profiles. Consolidation of stocks creates pooling effects and minimizes costs. This study analyzes a current military case where forward consolidation of equipment is considered using optimization, and payback periods are calculated for the cost of consolidating inventory at one of six locations. Results indicate that forward positioning and consolidation reduces time and cost, and also creates savings in reverse logistics flows. The study has implications for geographically diverse supply chains such as humanitarian aid and emergency response operations.
Skipper, Joseph B., Bell, John E., Cunningham, William A., & Mattioda, Daniel D. (2010). Forward positioning and consolidation of strategic inventories. Journal of Transportation Management, 21(1), 27-41. doi: 10.22237/jotm/1270080180