Freight and Goods Movement

Distribution Strategies that Minimize Transportation and Inventory Costs

Burns, Lawrence D.
Hall, Randolph W.
Blumenfeld, Dennis E.
Daganzo, Carlos F.
1985

This paper develops an analytic method for minimizing the cost of distributing freight by truck from a supplier to many customers. It derives formulas for transportation and inventory costs, and determines the optimal trade-off between these costs. The paper analyzes and compares two distribution strategies: direct shipping (i.e., shipping separate loads to each customer) and peddling (i.e., dispatching trucks that deliver items to more than one customer per load). The cost trade-off in each strategy depends on shipment size. Our results indicate that, for direct shipping, the optimal...

Analyzing Trade-offs Between Transportation, Inventory and Production Costs on Freight Networks

Blumenfeld, Dennis E.
Burns, Lawrence D.
Diltz, J. David
Daganzo, Carlos F.
1985

The purpose of this paper is to determine optimal shipping strategies (i.e. routes and shipment sizes) on freight networks by analyzing trade-offs between transportation, inventory, and production set-up costs. Networks involving direct shipping, shipping via a consolidation terminal, and a combination of terminal and direct shipping are considered. This paper makes three main contributions. First, an understanding is provided of the interface between transportation and production set-up costs, and of how these costs both affect inventory. Second, conditions are identified that indicate...

Physical Distribution from a Warehouse: Vehicle Coverage and Inventory Levels

Daganzo, Carlos F.
Newell, Gordon F.
1985

This paper studies the costs involved in distributing items from a warehouse or depot to randomly scattered customers on a day-to-day basis. Two trade-offs are explored simultaneously. The first one arises because by accumulating large inventories at the depot it is possible to build more efficient distribution tours. This trade-off has already been explored for both distribution of goods (Burns et al., 1983) and passengers (Daganzo et al., 1977; Hendrickson, 1978). Another tradeoff, which involves the length of individual vehicle tours (Clarens and Hurdle, 1975), balances the inventory...

Configuration of Physical Distribution Networks

Daganzo, Carlos F.
Newell, Gordon F.
1986

Distribution problems, including vehicle routing and warehouse location problems, are usually formulated by considering a finite number of possible locations for the customers, the warehouses, and vehicle stops. The question of selecting which of these points are actually used (and how) is a mixed-integer programming problem which is difficult to solve. Thus, such a discrete formulation results in a problem that has to be solved heuristically; it also entails a large data preparation effort each time a solution has to be developed in response to changing world conditions. The continuous...

Distributing Nonstorable Items Without Transshipments

Han, Anthony F. W.
Daganzo, Carlos F.
1986

The research reported in this paper attempted to find optimal strategies for distributing items from one depot to many demand points without transshipments and within a limited amount of time. The objective was to find a near optimal partition of the region supplied by the depot into districts (the zones containing the points visited by one delivery route) and corresponding shipment sizes and costs. Initially, the average distribution cost per demand point on a single delivery route was studied using expressions that relate route length to the dimensions of a delivery district. Two...

Design of Multiple Vehicle Delivery Tours—II Other Metrics

Newell, Gordon F.
Daganzo, Carlos F.
1986

The methods described in Part I for a ring-radial metric are generalized to a network having a fine nearly rectangular grid of local roads, but possibly with a few fast roads superimposed. To select delivery zones, one should first draw the equi-travel-time contours from the source and then choose nearly rectangular zones with suitable width and orientation relative to the network grid and the local contour lines. Some illustrations are given for an idealized square grid of roads. In this case the rectangular delivery zones should be oriented at 45° to the grid, perpendicular to the...

Design of Multiple-Vehicle Delivery Tours—I A Ring-Radial Network

Newell, Gordon F.
Daganzo, Carlos F.
1986

Certain aspects of what is commonly described as the “Vehicle Routing Problem” are discussed. We wish to deliver items to a large number of points randomly distributed over some region by means of vehicles, each of which can deliver to only C points. The key to any detailed routing to minimize the cost of delivery (by hand or computer) is first to partition the region into zones in which individual vehicles make deliveries. We assume here that there are many such zones, an average density of points δ, that the “unit of length” δ-1/2 is large compared with the spacing between roads, and C...

Optimum Bunker Size and Location in Underground Coal Mine Conveyor Systems

Baral, Suresh C.
Daganzo, Carlos F.
Hood, Michael
1987

The transportation of coal out of a mine is usually done by a serially linked system of conveyors. It is apparent that in a serially dependent system of this type the failure of any one component (conveyor) causes the complete system to be shut down. The provision of bunkers at strategically located points in the conveyor system can result in the production of coal even in the event of failure of some outbye conveyors. Although the use of bunkers can increase mine system availability, the maximum possible system availability may not be attained if the bunker capacity is inadequate and/or...

Shipment Composition Enhancement at a Consolidation Center

Daganzo, Carlos F.
1988

When items of different shapes, sizes and weights are transported, some item combinations make most effective use of a vehicle's capacity. A consolidation center, receiving shipments of various items from different origins, can act as a point where those combinations can be formed. While sending shipments through the center invariably increases the total item-miles traveled, judicious shipping can reduce the vehicle-miles traveled. This paper examines ways in which loads should be made up to achieve as large a reduction in vehicle-miles as possible. The paper first considers a building...

A Comparison of In-Vehicle and Out-of- Vehicle Freight Consolidation Strategies

Daganzo, Carlos F.
1988

This paper addresses physical distribution problems, in which items have to be distributed from an origin to many destinations, and it examines ways to reduce inventories. Under certain conditions, a peddling strategy with no transshipments is shown to be superior to any strategy with transshipments. Although the conditions leading to this result are not always met, the results suggest that transshipments are undersirable for freight distribution, unless of course they serve a purpose unrelated to inventory. This is contrast with many-to-many shipping operations which, under the same...