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Oper Res Int J (2013) 13:211232
DOI 10.1007/s12351-011-0118-2
ORIGINAL PAPER
Omar Ben-Ayed
Received: 3 August 2010 / Revised: 28 May 2011 / Accepted: 15 July 2011 / Published online: 3 August 2011 Springer-Verlag 2011
Abstract This paper presents and discusses the parcel distribution network design problem for ground shipments. An optimization model is developed to formulate this problem. The model is distinguished by its ability to: (i) incorporate actual economies of scale rather than relying on the theoretical discount factor commonly used in the literature, (ii) deal with more than one level of facilities and locate them simultaneously, (iii) nd the optimal hub-to-hub connections rather than assuming a complete hub-to-hub network. More capabilities of the formulation include size-reduction features and piecewise travel cost functions. The model is illustrated with an application to a real-world problem; the generated design decreases the annual operating cost by around 9%.
Keywords Network design Parcel Distribution Station Hub Facility
Location Hierarchical Hub-and-spoke
1 Introduction
Parcel distribution, referred to as well as freight distribution and shipment distribution, involves a network where each node can be a sending and/or a recipient customer. The parcels have to go simultaneously between all origindestination pairs. As the ow between most pairs is too small to be shipped on a dedicated vehicle, parcels are usually consolidated to be jointly routed on most portions of their trips from their origins to their destinations. The network design problem for
O. Ben-Ayed (&)
CREM, FSEGS, University of Sfax, BP 1088, Sfax 3018, Tunisia e-mail: [email protected]
O. Ben-Ayed
Optimal Solutions, 505 N. Rock Road # 1113, Wichita, KS 67206, USA
Parcel distribution network design problem
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parcel distribution consists of locating and allocating the facilities where parcels are consolidated and/or sorted.
The types of facilities may vary from one company to another; the most common types are the stations (also referred to as terminals or depots in some companies) and the hubs. The stations are the facilities where: (i) all outbound parcels are consolidated, after they are collected from sending customers, and (ii) all inbound parcels are sorted, before they are delivered to receiving customers. Because it is often too expensive to dedicate a vehicle between each pair of stations (i.e. the volume between two stations is...