Premium
A dual‐response strategy for global logistics under uncertainty: a case study of a third‐party logistics company
Author(s) -
Wu Yue
Publication year - 2012
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/j.1475-3995.2011.00839.x
Subject(s) - notice , truck , dual (grammatical number) , humanitarian logistics , business , operations research , stochastic programming , traffic management , computer science , operations management , industrial organization , transport engineering , economics , mathematical optimization , physics , thermodynamics , art , literature , mathematics , political science , law , engineering
This paper examines global logistics problems experienced by a third‐party logistics (3PL) company that is responsible for transporting goods from one country to another by road, as well as warehousing goods in two countries. Because of the limited fleet capacity, the logistics company has to hire additional trucks from two countries in advance. However, customer's shipment information is uncertain, and the accurate shipment notice is only available on the shipping day. This paper proposes a dual‐response logistics strategy to be as responsive as possible for coping with short shipment notice time and uncertainty involved. A two‐stage stochastic mixed 0–1 programming model is formulated to satisfy customer demand while minimizing the total logistics cost. A series of experiments demonstrate the effectiveness of the proposed stochastic model. Compared to the corresponding expected value model, the stochastic model provides a more responsive and less expensive global logistics system.