An optimization model for automated selection of economic and ecologic delivery profiles in area forwarding based inbound logistics networks

Area Forwarding Based Inbound Logistics Networks are used by several large companies whose suppliers are spread widely to reduce costs by consolidating transported goods in an early stage of the transport. Managing material flows in those networks is a complex task, especially if the synergy effects in the main leg shall be used to reduce costs and environmental pollution. One technique to decrease steering overhead is the use of delivery profiles, which provide a fixed delivery frequency for each supplier and ease planning for supply chain partners. The selection of a delivery profile has effects on both economic and ecologic outcome of the transportation system and thus should be done carefully. In this work we present a new mixed integer programming model which is able to simultaneously deal with the complex tariff systems used in area forwarding and delivery profile selection in acceptable computing time. Our solution methodology exploits problem specific structure to decompose the model into several parts. On the basis of an industrial case study we evaluate the planning solutions obtained by our model compared to the plans currently implemented in practise. Results are analysed both in terms of monetary savings as well as optimisation runtime.