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Improving the Operational Efficiency of Parcel Delivery Network with a Bi-Level Decision Making Model

Author

Listed:
  • Daisik Nam

    (Institute of Transportation Studies, University of California, Irvine, CA 92697, USA)

  • Minyoung Park

    (Graduate School of Logistics, Inha University, Incheon 22212, Korea)

Abstract

This article proposes a mathematical model for integrating terminal operation strategies with shipment scheduling. We are motivated by findings from the literature on the integrated design of logistic systems. The objective of this research is to efficiently utilize the existing hub terminals and transport network by considering the minimization of costs related to terminal congestion, transport, and carbon dioxide (CO 2 ) emissions. Cooperative behaviors of terminal managers and fleet assignment managers are modeled in a bi-level problem framework. The total cost includes a processing cost and transport cost, and CO 2 related to the assigned fleets. We introduce a terminal cost function to capture the relationship between unit processing cost with respect to hub delay, which allows us to find the minimum cost path and efficiently distribute shipments to hub terminals. The case study shows that the collaborative logistics outperforms a single routing strategy and capacity expansions in minimization of both total cost and CO 2 emissions.

Suggested Citation

  • Daisik Nam & Minyoung Park, 2020. "Improving the Operational Efficiency of Parcel Delivery Network with a Bi-Level Decision Making Model," Sustainability, MDPI, vol. 12(19), pages 1-19, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:19:p:8042-:d:421509
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    References listed on IDEAS

    as
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