The freight allocation problem with lane cost balancing constraint

Andrew Lim, Hu Qin and Zhou Xu

European Journal of Operational Research, 2012, vol. 217, issue 1, 26-35

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.

Keywords: Tabu search; Freight allocation; Minimum quantity commitment; Cost balance (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:217:y:2012:i:1:p:26-35

DOI: 10.1016/j.ejor.2011.08.028

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