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Design Of Robust Distribution Networks Run By Third Party Logistics Service Providers

Author

Listed:
  • M. P. M. HENDRIKS

    (Department of Mechanical Engineering, Manufacturing Networks Group, Technische Universiteit Eindhoven, P. O. Box 513, 5600 MB Eindhoven, The Netherlands)

  • D. ARMBRUSTER

    (Department of Mechanical Engineering, Manufacturing Networks Group, Technische Universiteit Eindhoven, P. O. Box 513, 5600 MB Eindhoven, The Netherlands;
    School of Mathematical and Statistical Sciences, Arizona State University, Tempe, 85287, USA)

  • M. LAUMANNS

    (Institute for Operations Research, ETH Zurich, 8092 Zurich, Switzerland)

  • E. LEFEBER

    (Department of Mechanical Engineering, Manufacturing Networks Group, Technische Universiteit Eindhoven, P. O. Box 513, 5600 MB Eindhoven, The Netherlands)

  • J. T. UDDING

    (Department of Mechanical Engineering, Manufacturing Networks Group, Technische Universiteit Eindhoven, P. O. Box 513, 5600 MB Eindhoven, The Netherlands)

Abstract

We consider a third party logistics service provider (LSP), who faces the problem of distributing different products from suppliers to consumers having no control on supply and demand. In a third party set-up, the operations of transport and storage are run as a black box for a fixed price. Thus the incentive for an LSP is to reduce its operational costs. The objective of this paper is to find an efficient network topology on a tactical level, which still satisfies the service level agreements on the operational level. We develop an optimization method, which constructs a tactical network topology based on the operational decisions resulting from a given model predictive control (MPC) policy. Experiments suggest that such a topology typically requires only a small fraction of all possible links. As expected, the found topology is sensitive to changes in supply and demand averages. Interestingly, the found topology appears to be robust to changes in second order moments of supply and demand distributions.

Suggested Citation

  • M. P. M. Hendriks & D. Armbruster & M. Laumanns & E. Lefeber & J. T. Udding, 2012. "Design Of Robust Distribution Networks Run By Third Party Logistics Service Providers," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 15(05), pages 1-23.
    • Handle: RePEc:wsi:acsxxx:v:15:y:2012:i:05:n:s021952591150024x
    DOI: 10.1142/S021952591150024X
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    Cited by:

    1. Evangelos Gkanatsas & Harold Krikke, 2020. "Towards a Pro-Silience Framework: A Literature Review on Quantitative Modelling of Resilient 3PL Supply Chain Network Designs," Sustainability, MDPI, vol. 12(10), pages 1-25, May.
    2. Nafiseh Fallahi & Ashkan Hafezalkotob & Sadigh Raissi & Vahidreza Ghezavati, 2023. "Cooperation and coopetition among retailers-third party logistics providers alliances under different risk behaviors, uncertainty demand and environmental considerations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 5597-5633, June.

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