A decision on the truckload and less-than-truckload problem: An approach based on MCDA

Abstract The quantity and frequency of merchandise shipped from each distribution centre to each customer by Full Truckload (TL) and Less Than Truckload (LTL) represent important factors for distribution planning. The transport of smaller quantities leads to reduced costs associated with retailers' inventories but requires additional freight costs. In contrast, the transport of greater quantities with less frequency may reduce transport costs but increases inventory costs due to the need to maintain higher inventory levels. This decision is not easy because some criteria related to costs and to transit time may conflict, and many other important criteria that influence the choice of TL or LTL carriers are not easily quantifiable. This article proposes a Multi-Criteria Decision Analysis (MCDA) approach for structuring and appraising the transportation modes of a large and complex Joint Transportation and Inventory Problem (JTIP). Because this study is based on the Multi-Attribute Utility (MAUT), the proposed approach enables a robust analysis of the most suitable decision according to the preferences and risk aversion of the company's decision makers, considering a group of criteria that are evaluated simultaneously. Sensitivity analyses verify that incorporating utility functions is key to proposing a solution that is more personalised and aligned with the preferences and real concerns of decision makers. A case study is conducted for a telecommunications company to test the efficiency of the approach in real situations.