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The freight allocation problem with lane cost balancing constraint

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  • Lim, Andrew
  • Qin, Hu
  • Xu, Zhou

Abstract

We consider a problem faced by a buying office for one of the largest retail distributors in the world. The buying office plans the distribution of goods from Asia to various destinations across Europe. The goods are transported along shipping lanes by shipping companies, many of which have collaborated to form strategic alliances; each lane must be serviced by a minimum number of companies belonging to a minimum number of alliances. The task involves purchasing freight capacity from shipping companies for each lane based on projected demand, and subject to minimum quantity requirements for each selected shipping company, such that the total transportation cost is minimized. In addition, the allocation must not assign an overly high proportion of freight to the more expensive shipping companies servicing any particular lane, which we call the lane cost balancing constraint.

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  • Lim, Andrew & Qin, Hu & Xu, Zhou, 2012. "The freight allocation problem with lane cost balancing constraint," European Journal of Operational Research, Elsevier, vol. 217(1), pages 26-35.
    • Handle: RePEc:eee:ejores:v:217:y:2012:i:1:p:26-35
    DOI: 10.1016/j.ejor.2011.08.028
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    Cited by:

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    2. Wang, Junjin & Liu, Jiaguo & Zhang, Xin, 2020. "Service purchasing and market-entry problems in a shipping supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    3. Fang Yang & Yao-Huei Huang, 2021. "An optimization approach for winner determination problem considering transportation cost discounts," Journal of Global Optimization, Springer, vol. 80(3), pages 711-728, July.
    4. Dellbrügge, Marius & Brilka, Tim & Kreuz, Felix & Clausen, Uwe, 2022. "Auction design in strategic freight procurement," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Jahn, Carlos & Blecker, Thorsten & Ringle, Christian M. (ed.), Changing Tides: The New Role of Resilience and Sustainability in Logistics and Supply Chain Management – Innovative Approaches for the Shift to a New , volume 33, pages 295-325, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    5. Aghdas Badiee & Hamed Kalantari & Chefi Triki, 2023. "Leader-based diffusion optimization model in transportation service procurement under heterogeneous drivers’ collaboration networks," Annals of Operations Research, Springer, vol. 322(1), pages 345-383, March.
    6. Lafkihi, Mariam & Pan, Shenle & Ballot, Eric, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 348-365.
    7. Yelin Fu & Kin Keung Lai & Liang Liang, 2016. "A robust optimisation approach to the problem of supplier selection and allocation in outsourcing," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(4), pages 913-918, March.

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