7-*Transport DecisionsCR (2004) Prentice Hall, Inc.Chapter 7If you are planning for one year, grow rice. If you are planning for 20 years, grow trees. If you are planning for centuries, grow men. A Chinese proverb

7-*Transport Decisionsin Transport StrategyCR (2004) Prentice Hall, Inc.

7-*Just a few of the many problems in transportationTypical Transport DecisionsCR (2004) Prentice Hall, Inc.

7-*Transport Service selectionCR (2004) Prentice Hall, Inc.

7-*Mode/Service Selection (Contd)Example Finished goods are to be shipped from a plant inventory to a warehouse inventory some distance away. The expected volume to be shipped in a year is 1,200,000 lb. The product is worth $25 per lb. and the plant and carrying costs are 30% per year.Other data are:CR (2004) Prentice Hall, Inc.

Include transport rateTransport Selection AnalysisCosttypeCompu-tationRailTruckAirTrans-portationRD.11(1,200,000)= $132,000.20(1,200,000)= $240,000.88(1,200,000)= $1,056,000In-transitinventory[.30(25)1,200,000(25)]/365= $616,438[.30(25) 1,200,000(13)]/365= $320,548[.30(25) 1,200,000(1)]/365= $24,658Plantinventory[.30(25) 100,000]/2= $375,000[.30(25) 40,000]/2= $150,000[.30(25) 16,000]/2= $60,000Whseinventory[.30(25.11) 100,000]/2= $376,650[.30(25.20) 40,000]/2= $151,200[.30(25.88) 16,000]/2= $62,112 Totals$1,500,088$ 861,748$1,706,770Improved serviceCR (2004) Prentice Hall, Inc.7-6

7-*Carrier RoutingCR (2004) Prentice Hall, Inc.

Determine the best path betweenorigin and destination points over a network of routes

Shortest route method is efficient forfinding the minimal cost route

Consider a time network between Amarillo and Fort Worth. Find the minimum travel time.

The procedure can be paraphrased as:

Find the closest unsolved node to a solved node

Calculate the cost to the unsolved node by adding the accumulated cost to the solved node to the cost from the solved node to the unsolved node.

Select the unsolved node with the minimum time as the new solved node. Identify the link.

When the destination node is solved, the computations stop. The solution is found by backtracking through the connections made.

7-*Carrier Routing (Contd)Can be a weighted index of time and distanceCR (2004) Prentice Hall, Inc.

7-*Shortest Route MethodCR (2004) Prentice Hall, Inc.

7-*MAPQUEST SOLUTIONMapquest at www.mapquest.comCR (2004) Prentice Hall, Inc.

7-*Routing from Multiple PointsThis problem is solved by the traditional transportation method of linear programmingCR (2004) Prentice Hall, Inc.

7-*TRANLP problem setupSolutionCR (2004) Prentice Hall, Inc.

7-*Routing with a Coincident Origin/Destination PointCR (2004) Prentice Hall, Inc.

Single Route Developed by ROUTESEQ in LOGWARE0 1 2 3 4 5 6 7 8876543210X coordinates1231911121314151617184567891020DY coordinates0 1 2 3 4 5 6 7 8876543210X coordinates1231911121314151617184567891020DY coordinatesCR (2004) Prentice Hall, Inc.7-14

7-*Multi-Vehicle Routing and SchedulingCR (2004) Prentice Hall, Inc.

A problem similar to the single-vehicle routing problem except that a number of restrictions are placed on the problem. Chief among these are:

- A mixture of vehicles with different capacities

- Time windows on the stops

- Pickups combined with deliveries

-Total travel time for a vehicle

7-*Practical Guidelines for Good Routing and Scheduling1. Load trucks with stop volumes that are in closest proximity to each other(a) Weak clusteringDepot(b) Better clusteringCR (2004) Prentice Hall, Inc.

7-*Guidelines (Contd)2. Stops on different days should be arranged to produce tight clustersMay need to coordinate with sales to achieve clustersCR (2004) Prentice Hall, Inc.

7-*Guidelines (Contd)3. Build routes beginning with the farthest stop from the depot4. The stop sequence on a route should form a teardrop pattern (without time windows)5. The most efficient routes are built using the largest vehicles available first6. Pickups should be mixed into delivery routes rather than assigned to the end of the routes7. A stop that is greatly removed from a route cluster is a good candidate for an alternate means of delivery8. Narrow stop time window restrictions should be avoided (relaxed)

7-*Application of Guidelines to Casket DistributionTypical weekly demand and pickupsCR (2004) Prentice Hall, Inc.

7-*Application of Guidelines to Casket Distribution (Contd)Division of sales territories into days of the weekTerritories of equal size to minimize number of trucksCR (2004) Prentice Hall, Inc.

7-*Application of Guidelines to Casket Distribution (Contd)Route design within territoriesCR (2004) Prentice Hall, Inc.

7-*Sweep Method for VRPExample A trucking company has 10,000-unit vans for merchandise pickup to be consolidated into larger loads for moving over long distances. A days pickups are shown in the figure below. How should the routes be designed for minimal total travel distance?CR (2004) Prentice Hall, Inc.

7-*Depot1,0002,0003,0002,0004,0002,0003,0003,0001,0002,0002,0002,000Stop Volume and LocationCR (2004) Prentice Hall, Inc.

7-*Sweep directionis arbitraryDepot1,0002,0003,0002,0004,0002,0003,0003,0001,0002,0002,0002,000 Sweep Method SolutionCR (2004) Prentice Hall, Inc.

The Savings Method for VRPDepotDepot(a) Initial routing Route distance = d0,A +dA,0 +d0,B+ dB,0(b) Combining two stops on a route Route distance = d0,A +dA,B +dB,0ABABStopStop00Savings is better than Sweep methodhas lower average errorCR (2004) Prentice Hall, Inc.7-25

7-*Savings Method ObservationThe points that offer the greatest savings when combined on the same route are those that are farthest from the depot and that are closest to each other.This is a good principle for constructing multiple-stoproutesCR (2004) Prentice Hall, Inc.

Route Sequencing in VRP89101112123456Route #1Route #10AMPMRoute #6Route #9Route #4Route #5Route #8Route #2Route #7Route #3Truck #1Truck #2Truck #3Truck #4Truck #5Minimize number of trucks by maximizing number of routes handled by a single truckCR (2004) Prentice Hall, Inc.7-27

7-*Freight ConsolidationCombine small shipments into larger onesA problem of balancing cost savings against customer service reductionsAn important area for cost reduction in many firmsBased on the rate-shipment size relationship for for-hire carriersCR (2004) Prentice Hall, Inc.

7-*Freight Consolidation AnalysisCR (2004) Prentice Hall, Inc.

Freight Consolidation Analysis (Contd) Separate shipmentsCR (2004) Prentice Hall, Inc.7-30

Freight Consolidation Analysis (Contd)a 480 = 50 + 250 + 180Computing transport cost for one combined, three-day shipmentCheaper, but what aboutthe service effects of holdingearly orders for a longer timeto accumulate larger shipmentsizes? Consolidated shipment Day 3 Rate x volume = costTopeka0.82 x 480a = $393.60Kansas City0.86 x 400 = 344.00Wichita0.68 x 1410 = 958.80 Total $1,696.40CR (2004) Prentice Hall, Inc.7-31