Investigating the mix of contract-based and on-demand sourcing for transportation services under fluctuate and seasonal demand

This paper addresses the issue of transportation services sourcing using the mix of contract-based and on-demand sourcing. The model considers when the demand is fluctuating following a seasonal pattern. The discrete-event simulation has been used to identify the appropriate mix and the effect of the demand fluctuation measured by three performance indicators: product fill rate, shipment reliability, and truck utilisation. A set of experiments have been conducted to demonstrate the effect of various factors on the performance of transportation sourcing. The experiments show that more on-demand sourcing improves the product fill rate but worsens the shipment reliability and the truck utilisation. The results also show that the performance indicators are worsening as the demand becomes more fluctuated.