Transcript Document

Transportation
Dickson K.W. Chiu
PhD, SMIEEE
Text: Ballou - Business Logistics Management, 5/E (Chapter 6,7)
1
Learning Objectives


To understand some basic domain knowledge
of transportation
To anticipate typical problems involved in
transportation planning and decisions
Dickson Chiu 2006
Transport-2
4a.1 Transport Fundamentals
Business Logistics Management, 5/E (Chapter 6)
3
Transport System Defined

Performance





Average transit time
Transit time variability
Loss and damage
Other factors including availability, capability,
frequency of movement, and various less tangible
services
Cost



Line haul
Terminal/local
Accessorial or special charges
Dickson Chiu 2006
Transport-4
Transport Choices

Primary intercity carriers





Air
Truck
Rail
Water
Pipe

Small shipment carriers





Agents


Coordinated services



Piggyback
Birdyback
Fishyback


UPS
Federal Express
Postal services
Bus Package Express
Freight forwarders
Shipper associations
Others





Dickson Chiu 2006
Autos
Bicycles
Taxis
Human
Electronic !!
Transport-5
Importance of Modes by Products Hauled





Air - very high-valued, time sensitive products
Truck - moderately high-valued, time sensitive
products. Many finished and semi-finished
goods
Rail - low-valued products including many raw
materials
Water - very low-valued products moved
domestically, high -valued if moved
internationally
Pipe - generally limited to petroleum products
and natural gas
Dickson Chiu 2006
Transport-6
Importance of Modes by Volume Moved
Transportation
mode
Railroads
Trucks
Inland waterways
Oil pipelines
Air
Total
Percent of
total volume
36.5%
24.9
16.3
22.0
0.3
100.0
Dickson Chiu 2006
Transport-7
Performance vs Cost





Air generally fast over long
distances and a fair degree
of relative variability
Water is very slow and
moderately reliable
Pipe is very slow but reliable
Truck is moderately fast and
reliable
Rail is slower and less
reliable than truck
Mode
Rail
Truck
Water
Pipeline
Air
Dickson Chiu 2006
¢/ton-mile
2.28
26.19
0.74
1.46
61.20
Transport-8
Rate Types

Line haul rates

Class





Specific rates for given shipment sizes for specific products
moving between designated points
Special service charges



Contract rates
Drayage (local delivery)
Commodity and contract rates


Freight classification of items
Rate tables of tariffs
Extra charges
Stop-off privilege example
Private carrier costing
Dickson Chiu 2006
Transport-9
Rate Profiles by Distance
Dickson Chiu 2006
Transport-10
Rate Profiles by Volume

Dickson Chiu 2006
Should always check to see
if shipment can be declared
at the next higher weight
break for a lower rate and
lower total charges
Transport-11
4a.1 Transport Decisions
Business Logistics Management, 5/E (Chapter 7)
12
Typical Transport Decisions


Mode/Service selection
Private fleet planning






Carrier routing
Routing from multiple points
Routing from coincident origin-destination points
Vehicle routing and scheduling
…
Freight consolidation
Dickson Chiu 2006
Transport-13
Mode/Service Selection

The Problem



Define the available choices
Balance performance effects on inventory against
the cost of transport
Methods for selection



Indirectly through network configuration
Directly through channel simulation
Directly through a spreadsheet approach
Dickson Chiu 2006
Transport-14
Carrier Routing



Determine the best path between origin and destination
points over a network of routes
Shortest route method is efficient for finding the minimal
cost route (cf. taught in algorithm course)
The procedure can be paraphrased as:




Find the closest unsolved node to a solved node
Calculate the cost to the unsolved node by adding the
accumulated cost to the solved node to the cost from the solved
node to the unsolved node.
Select the unsolved node with the minimum time as the new
solved node. Identify the link.
When the destination node is solved, the computations stop. The
solution is found by backtracking through the connections made.
Dickson Chiu 2006
Transport-15
Mapquest Solution
Mapquest at www.mapquest.com
CR (2004) Prentice Hall, Inc.
Dickson Chiu 2006
Transport-16
Routing from Multiple Points

This problem is solved by the traditional transportation method
of linear programming
4a
Supplier A
Supply  400
7
Plant 1
Requirements = 600
6
5
5
Supplier B
Supply  700
5
Plant 2
Requirements = 500
9
5
8
Plant 3
Requirements = 300
Supplier C
Supply  500
.
The transportation rate in $ per ton for an optimal routing between
supplier A and plant 1
a
Dickson Chiu 2006
Transport-17
Routing with a Coincident
Origin/Destination Point



Typical of many single truck routing problems from a single depot.
Mathematically, a complex problem to solve efficiently.
However, good routes can be found by forming a route pattern
where the paths do not cross - a "tear drop" pattern
D
D
Depot
Depot
(b) Good routing-no paths cross
(a) Poor routing-paths cross
Dickson Chiu 2006
Transport-18
Single Route Developed by ROUTESEQ in
LOGWARE
Y coordinates
Y coordinates
8
7
8
4
9
6
5
42
D
5
3
12
1
2
3
4
5
X coordinates
6
42
17
3
(a) Location of beverage accounts
and distribution center (D) with
grid overlay
CR (2004) Prentice Hall, Inc.
15
20
18
8
D
5
12
17
3
1
7
19
6
18
11 14
13 16
10
2
7
9
6
20 5
3
1
01
0
15
8
4
7
19
10
6
2
13 16
7
01
8 0
1
2
11 14
3
4
5
X coordinates
6
7
8
(b) Suggested routing pattern
Dickson Chiu 2006
7-14
Transport-19
Multi-Vehicle Routing and Scheduling

A problem similar to the single-vehicle routing
problem except that a number of restrictions
are placed on the problem. Chief among
these are:





A mixture of vehicles with different capacities
Time windows on the stops
Pickups combined with deliveries
Total travel time for a vehicle
Heuristic solution (see textbook)


“Sweep” Method
“Savings” Method
Dickson Chiu 2006
Transport-20
One Example Methodology



Warehouse
Funeral home
Determine typical weekly demand and pickups
Divide territories of equal size to minimize number of trucks
Route design within territories
CR (2004) Prentice Hall, Inc.
Dickson Chiu 2006
Transport-21
Freight Consolidation





Combine small shipments into larger ones
A problem of balancing cost savings against customer
service reductions
An important area for cost reduction in many firms
Based on the rate-shipment size relationship for forhire carriers
Cheaper, but what about the service effects of
holding early orders for a longer time to accumulate
larger shipment sizes?
Dickson Chiu 2006
Transport-22
4a.3 Summary
23
Summary


Much domain knowledge required
Scheduling and planning involves cross-disciplinary
knowledge




artificial intelligence, algorithms, optimization …
Note the data / information requirements and how IT helps
to collect / integrate the data for calculations and decision
making
Note many elementary methods are just static planning
beforehand – more advanced dynamic handling required to
handle exceptions and violation of assumptions (e.g., traffic
jam / accident, order cancellation)
Note the quality of service implication, especially service
delay
Dickson Chiu 2006
Transport-24