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Effect of Time Windows Regulations on Product Cost: An Urban Case Study of Carbonated Beverage Delivery

published in Annals of Management Science (AMS) Vol.
By Professor  

In this paper, an approach is suggested to study the impact of time windows based on urban freight regulations on product cost at firm level. An initial classification is done regarding Policy-focused research work and Vehicle Route Optimisation studies. It is observed that there are less evidences that firms or supply chains in the developing countries understand the effect of urban freight issues and regulations applied to them. In addition, cost aspect of time windows restriction has not been well studied from the supply chain perspective. To study the effect, a decision-making and cost bearing matrix was developed for Retailer and Supplier. Bi-level programming model was developed to quantify the effect of cost of the regulation at the product level. A case study of an India based multinational carbonated beverage company is taken up for validating the model carried out. We found that urban freight regulations related to time-window restrictions affected the cost from 0.00 to 2.33% (supplier) of the product retail price. Suppliers bearing the cost of product-movement are more affected by regulations than the retailers. Finally, we found that considering the existing low levels of tolls and penalty charges, larger vehicles are more cost efficient.