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Consolidation strategies for the delivery of perishable products

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  • Nguyen, Christine
  • Dessouky, Maged
  • Toriello, Alejandro

Abstract

A set of agricultural suppliers with low demands can save on long-haul transportation costs by consolidating their product. We consider a system with stochastic demand and a single consolidation point near the suppliers. We propose a look-ahead heuristic that takes advantage of economies of scale by aiming to ship larger quantities. We experimentally compare the heuristic’s performance against other simple policies, a rolling horizon algorithm, and a stochastic dynamic programming model. Our numerical results demonstrate that the heuristic provides solutions that are near the lower bound provided by the dynamic programming model, and that the benefits of consolidating depend on the size of the suppliers’ demand. We also propose a proportional cost allocation rule that encourages the suppliers to cooperate with each other instead of operating independently.

Suggested Citation

  • Nguyen, Christine & Dessouky, Maged & Toriello, Alejandro, 2014. "Consolidation strategies for the delivery of perishable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 108-121.
    • Handle: RePEc:eee:transe:v:69:y:2014:i:c:p:108-121
    DOI: 10.1016/j.tre.2014.05.018
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    4. Cook, Robert A. & Lodree, Emmett J., 2017. "Dispatching policies for last-mile distribution with stochastic supply and demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 106(C), pages 353-371.
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    6. Romero-Silva, Rodrigo & Mujica Mota, Miguel, 2022. "Trade-offs in the landside operations of air cargo hubs: Horizontal cooperation and shipment consolidation policies considering capacitated nodes," Journal of Air Transport Management, Elsevier, vol. 103(C).
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