Probabilistic Modeling of Freight Consolidation by Private Carriage

A program of freight consolidation is a systematic attempt to decrease total transportation cost between a given origin and destination. Fewer shipments of larger weight are dispatched, while recognizing the inventory carrying cost of holding the first-arriving orders before dispatching the combined load. Here we employ probabilistic modeling to choose the maximum holding time and desired dispatch quantity. We obtain practical decision rules for temporal consolidation for transportation in one's own truck. Final results are expressed visually through a nomograph (four inked graphs) relating decision variables, probability and demand parameters, and objective-function values. The nomograph permits an intuitive sensitivity analysis.

[1]  Douglas A. Popken.  An Algorithm for the Multiattribute, Multicommodity Flow Problem with Freight Consolidation and Inventory Costs , 1994, Oper. Res..

[2]  Carlos F. Daganzo,et al.  Shipment composition enhancement at a consolidation center , 1988 .

[3]  Alan S. Minkoff.  A Markov Decision Model and Decomposition Heuristic for Dynamic Vehicle Dispatching , 1993, Oper. Res..

[4]  G C Jackson,et al.  A SURVEY OF FREIGHT CONSOLIDATION PRACTICES , 1985 .

[5]  James H. Greene,et al.  Production and Inventory Control Handbook , 1970 .

[6]  Warren B. Powell,et al.  Analysis of Vehicle Holding and Cancellation Strategies in Bulk Arrival, Bulk Service Queues , 1985, Transp. Sci..

[7]  John E Tyworth,et al.  Traffic Management: Planning, Operations, and Control , 1991 .

[8]  Warren B. Powell,et al.  The Bulk Service Queue with a General Control Strategy: Theoretical Analysis and a New Computational Procedure , 1986, Oper. Res..

[9]  Robert Lorin Cook,et al.  MULTI-STAGE TRANSPORTATION CONSOLIDATION ANALYSIS USING DYNAMIC SIMULATION , 1987 .

[10]  James K. Higginson,et al.  Markovian Decision Processes in Shipment Consolidation , 1995, Transp. Sci..

[11]  James K. Higginson.  Modeling shipper costs in physical distribution analysis , 1993 .

[12]  James H. Bookbinder,et al.  An information system for simultaneous consolidation of inbound and outbound shipments , 1993 .

[13]  Warren B. Powell,et al.  Clustering algorithms for consolidation of customer orders into vehicle shipments , 1992 .

[14]  Leon Wm. Morse.  Practical Handbook of Industrial Traffic Management , 1990 .

[15]  Curtis M. Grimm,et al.  Determinants of Shortline Railroad Performance , 1993 .

[16]  Jatinder N. D. Gupta,et al.  A METHODOLOGY FOR DECISION MAKING THROUGH QUEUING ANALYSIS , 1972 .

[17]  R. Hall.  CONSOLIDATION STRATEGY : INVENTORY, VEHICLES AND TERMINALS , 1987 .

[18]  T. Koopmans,et al.  Studies in the Economics of Transportation. , 1956 .

[19]  Randolph W. Hall,et al.  Distribution Strategies that Minimize Transportation and Inventory Costs , 1985, Oper. Res..

[20]  Shaler Stidham,et al.  Cost Models for Stochastic Clearing Systems , 1977, Oper. Res..

[21]  Martha C. Cooper,et al.  Cost and Delivery Time Implications of Freight Consolidation and Warehousing Strategies , 1984 .

[22]  D C Boger,et al.  ASSESSING THE IMPACT OF CONSOLIDATION ON INBOUND VENDOR TRAFFIC , 1987 .

[23]  Norman Gaither,et al.  A nomograph for EOQs with delayed billing offers , 1986 .

[24]  James F. Campbell.  Freight consolidation and routing with transportation economies of scale , 1990 .

[25]  Shaler Stidham,et al.  Stochastic clearing systems , 1974 .

[26]  D. Blumenfeld,et al.  Analyzing trade-offs between transportation, inventory and production costs on freight networks , 1985 .

[27]  James K. Higginson.  Recurrent decision approaches to shipment‐release timing in freight consolidation , 1995 .