Modeling the Measurable Reliability on Complete Global Logistics Systems

Abstract

The purpose of this paper is to propose an extended model based upon Vidal & Goetschalckx's (2000) model and Lin, Wu & Lee's (2003) model, emphasizing on how to add concerns of reliabilities on all players in a complete global logistics system, and to make use of the fault tree analysis (FTA) for in depth analysis on reliability patterns. In order to make the model closer to the realistic environment, and therefore proposed two operation modes in the extension model. Mode 1 operation aims to seek minimum cost on a target of system reliability; whereas Mode 2 operation concentrates on finding out maximum system reliability on a target of cost. To further examine the feasibility of this extended model, experiments on a simplified six echelon complete global logistics structure are done. In short, the experiment results help not only to validate the extended model, but also to highlight the effects of the non-linear relation between system reliability and cost. In conclusion, this study provides not merely an improved quantitative reference model for planning the overall logistics system; the two operation modes are believed to be useful for decision makers in terms of how to balance these two kernels but tradeoff concerns (i.e., overall system reliability and total cost) in a complete global logistics system.