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Continuum approximation techniques for the design of integrated package distribution systems
Author(s) -
Smilowitz Karen R.,
Daganzo Carlos F.
Publication year - 2007
Publication title -
networks
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.977
H-Index - 64
eISSN - 1097-0037
pISSN - 0028-3045
DOI - 10.1002/net.20189
Subject(s) - computer science , routing (electronic design automation) , mathematical optimization , network planning and design , operations research , service (business) , industrial engineering , mathematics , engineering , economics , computer network , economy
Abstract Complex package distribution systems are designed using idealizations of network geometries, operating costs, demand and customer distributions, and routing patterns. The goal is to find simple, yet realistic, guidelines to design and operate a network integrated both by transportation mode and service level; i.e., overnight (express) and longer (deferred) deadlines. The decision variables and parameters that define the problem are presented along with the models to approximate total operating cost. The design problem is then reduced to a series of optimization subproblems that can be solved easily. The proposed approach provides valuable insight for the design and operation of integrated package distribution systems. Qualitative conclusions suggest that benefits of integration are greater when deferred demand exceeds express demand. This insight helps to explain the different business strategies of package delivery firms today. © 2007 Wiley Periodicals, Inc. NETWORKS, Vol. 50(3), 183–196 2007