This paper presents and discusses the bidirectional courier distribution network design problem for the multimodal load movements. Courier logistics involve movement of parcels across multimodal transports (air and road) to reach the delivery locations within a given specific turnaround time (TAT). The current business objective is to arrive at the least cost transport mode combinations for each of the origin–destination combinations. There are close to 10,000+ origin–destination combinations with multiple product types having different TAT requirements. There exist multiple transportation modes (road and air) with varying cost depending on connection time, service taken (priority loading) and multiple transport connection timings within each mode for the same origin–destination combination. The solution is developed for a given average daily load across the origin–destination combinations at start of each month/fortnight as relevant. The network is designed as a hub-spoke model, and movement of the parcels is considered between origin and destination spoke. The parcel movement can happen across multiple hubs depending on available connectivity options. The problem is modeled as network flow problem using a time-line representation (including cooling time till next connection), considering the committed turnaround time (TAT) as a hard constraint. Apart from variable costs, fixed cost components like airway bill have also been considered in current solution development.
Optimized Multimodal Transportation for Efficient Parcel Movement in Courier Industry
Asset Analytics
2022-03-11
18 pages
Article/Chapter (Book)
Electronic Resource
English
Strategic network design , Collection time , Multimodal transportation , Transfer time , Distribution time , Cooling time , Turnaround time (TAT) , Mixed-integer linear programming (MILP) Business and Management , Operations Management , Operations Research, Management Science , Operations Research/Decision Theory , Optimization , Statistics, general
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