Integrating partner objectives in horizontal logistics optimisation models

Abstract

In this paper a general solution framework is presented for optimising decisions in a horizontal logistics cooperation. The framework distinguishes between the objective of the group and the objectives of the individual partners in the coalition. Although the importance of the individual partner interests is often acknowledged in the literature, the proposed solution framework is the first to include these objectives directly into the objective function of the optimisation model. The solution framework is applied to a collaborative variant of the clustered vehicle routing problem, for which we also create a set of benchmark instances.We find that by only considering a global coalition objective, the obtained solution is often suboptimal for some partners in the coalition. Providing a set of high quality alternative solutions that are Pareto efficient with respect to the partner objectives, gives additional insight in the sensitivity of a solution, which can support the decision making process. Our computational results therefore acknowledge the importance of including the individual partner objectives into the optimisation procedure.