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Design of Robust Distribution Networks Run by fourth Party Logistics Service Providers
 

Summary: Design of Robust Distribution Networks Run by fourth Party
Logistics Service Providers
M.P.M. Hendriks
, D. Armbruster,
, M. Laumanns
, E. Lefeber
, J.T. Udding
Abstract
We consider a fourth party logistics service provider (LSP), who faces the problem of
distributing different products from suppliers to consumers having no control on supply and
demand. In a fourth party set-up, the operations of transport and storage are run as a black
box for a fixed price. Within certain boundaries with respect to variability in supply and
demand, the LSP is bound to meet certain performance thresholds as determined in a Service
Level Agreement (SLA). In this case, the incentive for an LSP is to reduce its operational
costs, within the limits set by the SLA. The objective is to find an efficient network topology
on a tactical level, which still satisfies the service level agreements on the operational level.
We develop an optimization method, which constructs a tactical network topology based
on the operational decisions resulting from a given MPC policy. Experiments suggest that
such a topology typically requires only a small fraction of all possible links. As expected,
the found topology is sensitive to changes in supply and demand averages. Interestingly,

  

Source: Armbruster, Dieter - Department of Mathematics and Statistics, Arizona State University

 

Collections: Mathematics