Pre-distribution vs. post-distribution for cross-docking with transshipments

Cross-docking operation is a logistics service mode aims to remove the storage and picking up functions of a warehouse, and coordinate goods loading between delivery vehicles and shipping vehicles. Transshipment is another logistic technique that allows goods to be conveyed from an overstocked store to a nearby understocked store, to avoid backordering or loss of sale. This paper models and analyzes two typical cross-docking operations: pre-distribution cross-docking operations (Pre-C) and post-distribution cross-docking operations (Post-C) when transshipments among retail stores are applied. The different operational performances are investigated and compared. The analytical results show that, considering the inventory cost, transshipment cost and operations cost at the cross-dock, the suitability of Pre-C and Post-C are highly sensitive to operations environment factors such as the uncertainty of demand, the unit operations cost at the cross-dock, and the unit inventory holding and shortage cost.