Planning the structure of the parcel flow in a postal logistics system

Abstract

This article describes a computerized simulation model that makes it possible to compare alternative centre structures for the parcel flow in a postal logistics system. The main elements of a logistics system are presented in the introduction. The parcels are subject to two major activities, transportation and sorting. Concentrating sorting activities in a few sorting centres gives large scale advantages. But on the other hand transportation costs are augmented because parcels will make a detour before reaching their destination. Given an initial centre structure, i.e. number and location of potential sorting centres, the simulation model makes use of a heuristic procedure to determine the principle of processing for each individual parcel, i.e. central or decentrai sorting. The calculations are based on a mathematical model as described in section 2. The model comprises physical characteristics, costs and goals for service levels. The heuristic principle of the model is described in section 3. The heuristic procedure starts with an initial solution for transportation and sorting that is ameliorated step by step using different saving criteria for sub-optimization of parts of the model. Finally section 4 presents the application of the simulation model.