Transportation_routing-scheduling - ch14.qxd 3/26/2003 1:58...

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436 PART V Sourcing, Transporting, and Pricing Products Key Point Tailoring transportation based on customer density and distance, customer size, or product demand and value allows a supply chain to achieve appropriate responsiveness and cost. to reduce transportation costs while taking some advantage of aggregation. Cycle inventories are replenished using an inexpensive mode of transportation to save costs. 14.7 ROUTING AND SCHEDULING IN TRANSPORTATION The most important operational decision related to transportation in a supply chain is the routing and scheduling of deliveries. Managers must decide on the customers to be visited by a particular vehicle and the sequence in which they will be visited. For exam- ple, an online grocer like Peapod is built on delivering customer orders to their homes. The success of its operations turns on its ability to decrease transportation and delivery costs while providing the promised level of responsiveness to the customer. Given a set of customer orders, the goal is to route and schedule delivery vehicles such that the costs incurred to meet delivery promises are as low as possible.Typical objectives when routing and scheduling vehicles are a combination of minimizing cost by decreasing the number of vehicles needed, the total distance traveled by vehicles, and the total travel time of vehicles, as well as eliminating service failures such as a delay in shipments. We discuss routing and scheduling problems in the context of the manager of a Peapod DC. After customers place orders for groceries online, staff at the DC has to pick the items needed and load them on trucks for delivery. The manager must decide which trucks will deliver to which customers and the route that each truck will take when making deliveries.The manager must also ensure that no truck is overloaded and that promised delivery times are met. One morning, the DC manager at Peapod has orders from 13 different customers that are to be delivered.The location of the DC, each customer on a grid, and the order size from each customer are shown in Table 14.11. The manager has four trucks, each capable of carrying up to 200 units. The manager feels that the delivery costs are strongly linked to the total distance the trucks travel and that the distance between two points on the grid is correlated with the actual distance that a vehicle will travel between those two points.The manager thus decides to assign customers to trucks and identify a route for each truck with a goal of minimizing the total distance traveled. The DC manager must first assign customers to be served by each vehicle and then decide on each vehicle’s route.After the initial assignment, route sequencing and route improvement procedures are used to decide on the route for each vehicle. The DC manager decides to use the following computational procedures to support his decision: • The savings matrix method • The generalized assignment method We discuss how each method can be used to solve the routing and scheduling decision at Peapod.
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This note was uploaded on 03/02/2012 for the course ESI 6323 taught by Professor Guan during the Spring '09 term at University of Florida.

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Transportation_routing-scheduling - ch14.qxd 3/26/2003 1:58...

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