Profit-based reconfiguration of express courier service network with multiple consolidation terminals

Abstract

The design of an express service network is determined by considering the amount of initial investments and operating costs for terminals and service centres within the network. However, continuous modifications of network design are required to adjust to rapidly changing business environments. This study suggests an approach to the reconfiguration of an express courier service network with respect to assignments of service centres to consolidation terminals, adjustments of their cutoff times, and extensions of terminal capacities. We propose an integer programming model and a genetic algorithm based solution procedure for allowing express couriers to maximise their incremental profit. An illustrative numerical example with reduced data sets from an express courier in Korea is presented to demonstrate the practicality and efficiency of the proposed model and its solution procedure.