The impact of bimodal distribution in ocean transportation transit time on logistics costs : an empirical & theoretical analysis

Abstract

As ocean shipments have increased alongside globalization, transit time uncertainty has increased as well. This problem was observed to have variable levels of impacts on logistics cost and safety stock levels. This thesis examines the effects of bimodality in transit time distributions -in particular, the cost of ignoring bimodality. One method common in practice is to completely ignore variability. On the other hand, a popular theoretical method to account for transit time variability is to assume that demand over transit time is normally distributed. Which is, in many cases, false. To display the incorrectness of such assumptions, the paper will compare the two approaches to empirical analysis on bimodal transit time distributions.