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Shipment Consolidation Strategies for International Shipments

Shipment Consolidation Strategies for International Shipments. Wooseung Jang, James Noble, Na Deng. Purpose. Analyze the international logistics network, practices and supporting data Identify potential opportunities for cost savings by consolidating international shipments

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Shipment Consolidation Strategies for International Shipments

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  1. Shipment Consolidation Strategies for International Shipments Wooseung Jang, James Noble, Na Deng

  2. Purpose • Analyze the international logistics network, practices and supporting data • Identify potential opportunities for cost savings by consolidating international shipments • Consider frequent and small-volume shipments, and sea-road transportation • Develop mathematical models for shipment consolidation • Propose practical solutions fitting situations in Legget & Platt

  3. Current Logistics Network North America China Target branches in U.S. Ports of unloading in U.S. Target Vendors in China

  4. New Logistics Network LA Shanghai Target branches in U.S. Consolidation/deconsolidation center Target Vendors in China

  5. Problem Analysis • The shipment consolidation and dispatch problem • TL Multi-stop delivery problem • Container capacity constraints • Packing constraints Volume load factor: Weight load factor:

  6. Parameters Definitions

  7. Decision Variables Definitions

  8. Mathematical Modeling Minimize Container cost Handling cost TL cost LTL cost Subject to: Assign each shipment to one container Shipment i cannot be loaded in the container j unless container j is used Weight capacity cannot be violated with regard to weight load factor

  9. Mathematical Modeling Volume capacity cannot be violated w.r.t volume load factor The situations where handling cost incurred Mode selection (TL & LTL) and TL route selection Mode selection (TL & LTL) and TL route selection Binary variables Positive variable Positive variable

  10. Solution Method • Mixed Integer Linear Programming Model • Software: LINGO8.0 • Algorithms: Branch-and-Bound

  11. Scenario Analysis D B E C A • Five branches order together • How to consolidate cargo in the ocean container? • How to make inland transportation planning? 11

  12. Scenario Analysis (Conti.) All direct LTL Blue:container 1 Red:container 2 : LTL : TL Ocean Container D E C B A 12

  13. Scenario Analysis (Conti.) TL (no stop) &LTL (optimal) Blue:container 1 Red:container 2 : LTL : TL Ocean Container D E C B A 13

  14. Scenario Analysis (Conti.) TL (one stop) &LTL (optimal) Blue:container 1 Red:container 2 : LTL : TL D Ocean Container E C B A 14

  15. Scenario Analysis (Conti.) TL (two stop) &LTL (optimal) Blue:container 1 Red:container 2 : LTL : TL D Ocean Container E C B A 15

  16. Scenario Summarization 16

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