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Logistics/Supply Chain/optimize trolleys at vendor end


I want to optimize number of pallets that my supplier should have. He gives me material in trolleys or Pallets. Material flows from supplier to warehouse to my company's store to line side assembly. Now after the pallet or trolley is emptied it goes to return area. and when certain number of trolleys accumulate in return area which is sufficient for full truck load I return it to suppliers. Now I want to calculate the number of trollies that supplier should own such that it is a win win situation for both of us.I am incurring transportation cost and he is incurring cost of trolleys. My warehouse should always hold atleast 7 days of inventory and my company store should accomodate 3 days of inventory. Please help me in solving these problem. How can I solve this and what data I will be needing.  And if you can assume data on your own and solve this problem by giving an example it would be really helpful.

Hi and Good day

Thanks for the query. Instead of solving the problem upfront, I would give you the pointers so that you can collect the data/ analyze and implement yourself.

Your supplier sends the day to day material/part/components in trolleys. These trolleys go to the line side assembly and empty trolleys are kept in return area...once the accumulated empties reach FTL, you send this to the supplier. The supplier owns the trolleys and freight is your cost.

Please get the following data from the assembly/ SCM team

1. How many trolleys are provided by the supplier every shift? the batch quantity of parts/ fixtures
2. How many trolleys will fill a FTL
3. What is the average shift demand for this suppliers parts/ components

Lets assume that this supplier brings in five trolleys every shift and the five empties come to the return area during the shift. In case you run three shift operations, you can calculate the inventory holding quantity and keep that aside. Now lets assume that 30 trolleys fill a FTL and delivery to supplier point from factory is one day. So every third day you will be shipping the empties to the supplier. And about thirty shift trolleys shall be inventory.

So the trolley calculation shall be three days for demand i.e. about five per shift, three shifts, 45 trolleys + one buffer day demand, roughly 60 trolleys..other than the inventory holding ones..where you mentioned about 10 days inventory is kept as buffer...  

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Shaju Madhavan


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17 years of experience in Project Management, Logistics/ Transportation and SCM in India. Direct Implementation experience include - Logistics Business Consulting (Warehousing, Fleet Management, Distribution etc) - Inventory Management and Inventory Accuracies - Distribution, Network, Fleet Optimization - RFID, Barcode implementations - Business Plan, Business case, Startups, Advisory - Demand Planning & Forecasting - Supply Chain Design - 3PL/4PL services - Indian Logistics space - Cost reduction & Six Sigma - Logistics Contracting - IT enabled Logistics BPR - Logistics IT solutions like TMS/ WMS etc - Technology Applications deploying GPS/ GIS based applications - MR and MI reporting in this space

- Thermax Ltd - - one of the first b2b for transportation in India - infreight.comn - b2b and online freight exchange - Infreight Logistics Solutions Ltd - Consulting/ Technology and Operational Solutions Company


Graduate Engineer with executive general management from IIM, Bangalore

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