Shipping Strategy Research Articles

Liquefied Natural Gas Ship Route Planning Model Considering Market Trend Change

We consider a new biannual liquefied natural gas (LNG) ship routing and scheduling problem and a stochastic extension under boil-off gas (BOG) uncertainty while serving geographically dispersed multiple customers using a fleet of heterogeneous vessels. We are motivated not only by contract trend changes to shorter ones but also by technological advancesin LNG vessel design. The mutual coincidence of both transitions enables developing a new LNG shipping strategy to keep up with emerging market trend. We fi rst propose a deterministic LNG scheduling model formulated as a multiple vehicle routing problem (VRP). The model is then extended to consider BOG using a two-stage stochastic modeling approach in which BOG is a random variable. Since the VRP is typically a combinatorial optimization problem, its stochastic extension is much harder to solve. In order to overcome this computational burden, a Monte Carlo sampling optimization is used to reduce the number of scenarios in the stochastic model while ensuring ggood quality of solutions. The solutions are evaluated using expected value of perfect information (EVPI) and value of stochastic solution (VSS). The result shows that our proposed model yields more stable solutions than the deterministic model. The study was made possible by the NPRP award [NPRP 4-1249-2-492] from the Qatar National Research Fund (a member of the Qatar Foundation).

Implementing a Vendor Managed Inventory Policy in a Two-Stage Supply Chain with Stochastic Demands

In a two-stage supply chain, implementing Vendor Managed Inventory policies (VMI), the supplier assumes, in addition to his own inbound inventory, the responsibility of maintaining inventory at its retailers and ensuring that they will not run out of stock at any moment. This paper discusses an optimization approach, considering the impact of demand uncertainty on the inbound as well as the outbound inventory, for a two-stage supply chain implementing VMI. In the proposed approach, retailers are first clustered to minimize the within-cluster travel costs and/or distances and are then replenished using an optimal direct shipping strategy satisfying some additional restrictions.

An integrated inventory model for single vendor multi customer scenario with multiple shipments in a supply chain

The present study focuses on determining the economic ordering quantity (EOQ) and shipping strategy of an inventory system that is integrated with a single-product, single-vendor and multi-customer scenario. Depending on the demand of all customers, production and shipping policies are determined and a suitable model is presented to illustrate the transfer of unequally-sized batches in a lot. Optimum values for the decision variables are determined using a direct search method. To justify the lot-splitting solution approach for the integrated inventory problem, an alternative model with no lot splitting is devised and tested under the same conditions which produced similar or better results. A numerical example and the related sensitivity analysis are presented to show the effectiveness of the proposed model.

Stochastic Optimization of Empty Container Repositioning of Sea Carriage

To improve the efficiency of empty container repositioning for a shipping company, a stochastic optimization model of empty container repositioning of sea carriage was established by chance-constrained programming. The objective function was to minimize the cost of empty container repositioning including shipping, rening and shortage cost. In the model, shipping cost was decided by the number of ship used for empty container repositioning. The constraints of the model included meeting the need of empty containers, limit to the number of empty containers provided and the capacity of shipping. The numbers of empty containers required are stochastic. The stochastis model was transferred to an integer programming one. Lingo9.0 was used to solve the model and simulation was done under varied parameters to get a good shipping strategy. The results show that the model can provide an effective program of empty container repositioning for a shipping company and it is a good way to raise shipping efficiency.

A stochastic inventory routing problem with stock-out

In this paper, we study an inventory routing problem in which a supplier has to serve a set of retailers. For each retailer, a maximum inventory level is defined and a stochastic demand has to be satisfied over a given time horizon. An order-up-to level policy is applied to each retailer, i.e. the quantity sent to each retailer is such that its inventory level reaches the maximum level whenever the retailer is served. An inventory cost is applied to any positive inventory level, while a penalty cost is charged and the excess demand is not backlogged whenever the inventory level is negative. The problem is to determine a shipping strategy that minimizes the expected total cost, given by the sum of the expected total inventory and penalty cost at the retailers and of the expected routing cost. A hybrid rollout algorithm is proposed for the solution of the problem and its performance is evaluated on a large set of randomly generated problem instances.

An integrated inventory model for vendor-customer coordination in a supply chain

The present study focuses on determining economic ordering quantity (EOQ) and shipping strategy of an inventory system integrated with a single-product, single-vendor and multi-customer scenario. Depending on the demand of all customers, production and shipping policies are determined and present a suitable model to illustrate the transferring of equally-sized batches. Optimum values of the decision variables are determined using a direct search method. In order to justify the lot-splitting approach for solving the integrated inventory problem, alternative model with no lot splitting are devised and tested under the same circumstances which produce similar or better results. A numerical example and related sensitivity analysis are given to show the effectiveness of the proposed model.

The FedEx Problem

SummaryThe original shipping strategy of FedEx was to fly all packages to a hub during the afternoon and evening, sort them there, and then fly them to their destinations over night for delivery the next day. This leads to interesting mathematical questions: Given a population represented by points in Euclidean space or on a sphere, what is the location of the hub that minimizes the total distance to all the points? Is such a point unique? After answering these questions, we use census data from 2000 to examine how close the FedEx hub in Memphis is to the proper hub of the U.S. population.

Performance evaluation of distribution strategies for the inventory routing problem

Direct shipping strategy is an easy-to-implement distribution strategy frequently used in industrial distribution systems. In this paper, an analytic method is developed for performance evaluation of the strategy for the infinite horizon inventory routing problem with delivery frequency constraint. With the method, the effectiveness of direct shipping strategy can be represented as a function of some system parameters. We demonstrate that the effectiveness of direct shipping is at least the square root of the smallest utilization ratio of vehicle capacity. This implies that the effectiveness of the strategy can reach 100% (respectively, 94.86%) whenever the demand rate of each retailer is 100% (respectively, 90%) of the vehicle capacity multiplied by the upper bound of the delivery frequency. This insight can help a firm answer questions such as: under what conditions direct shipping strategy is effective and why, and how effective the strategy is under a specific condition? In case direct shipping strategy is proven ineffective, a more general Fixed Partition Policy (FPP) that combines direct shipping strategy and multiple-stop shipping strategy must be used. An analytic method is also developed for performance evaluation of general FPPs. We demonstrate that the effectiveness of an FPP depends on the total demand rate of the retailers in each partition (each retailer set) and their closeness level. This insight provides a useful guideline to the design of effective FPPs. The analytic methods make the performance improvement of a distribution system possible through adjusting its system parameters.

A rapid and efficient method for room temperature handling, storage and transport of RNA samples

We have developed a novel stabilization technology designed to protect RNA samples from degradation during dry storage at room temperature. The storage medium is based on the natural principles of anhydrobiosis (meaning "life without water"), a mechanism employed by some organisms that enables their survival while dry for >100 years. The objective of this study is to evaluate and develop an alternative handling, storage and shipping strategy to optimize RNA stabilization to facilitate biological research. Results demonstrate protection of total purified RNA samples for up to 14 months at room temperature and for an equivalent of over 7 years under accelerated aging conditions. Data will be presented demonstrating inhibition of RNA degradation even at extremely elevated temperatures, indicating that dried samples can be protected during fluctuating conditions typically experienced during shipment. Samples rehydrated from storage were used directly without further purification and did not interfere or inhibit downstream applications including bioanalyzer and microarray analysis, cDNA amplification, quantitative RT‐PCR and electrophoresis. Results will also be presented using the stabilization technology for the development of a reagent that permits convenient and efficient concentration of dilute RNA samples with minimal sample loss as compared to conventional methods, such as ethanol precipitation or vacuum concentrating. The development of novel RNA stabilization methods and reagents will have a significant impact on life science and biomedical research by eliminating some of the detrimental variables associated with the handling, storage and transport of labile RNA specimens.

Heuristic approaches for the inventory-routing problem with backlogging

We study an inventory-routing problem in which multiperiod inventory holding, backlogging, and vehicle routing decisions are to be taken for a set of customers who receive units of a single item from a depot with infinite supply. We consider a case in which the demand at each customer is deterministic and relatively small compared to the vehicle capacity, and the customers are located closely such that a consolidated shipping strategy is appropriate. We develop constructive and improvement heuristics to obtain an approximate solution for this NP-hard problem and demonstrate their effectiveness through computational experiments.

Room temperature storage and stabilization of complex biological samples

We have developed a novel stabilization technology designed to protect biological samples such as DNA, RNA, proteins, cells and blood from degradation during storage at room temperature (RT). The storage medium is based on the natural principles of anhydrobiosis (“life without water”), a mechanism employed by some organisms that enables their survival while dry for >100 years, and synthetic chemistry. The objective of this study is to evaluate and develop an alternative handling, storage and shipping strategy to facilitate biological research; the development of such technologies would provide a useful alternative to current cold storage procedures. Results demonstrate stabilization of DNA for >2 yrs at RT and for an equivalent of up to 14 years under accelerated aging conditions. Storage of bacterial cultures in the medium allows for rapid recovery of bacterial genomic and plasmid DNA that can be used directly in transformations, PCR, electrophoresis and restriction analysis. Data for the inhibition of degradation even at elevated temperatures will be presented, including stability of RNA, blood and other protein‐based samples. Results indicate that recovered samples can be used directly in downstream assays without interference or inhibition, including cloning, sequencing, PCR, restriction analysis, hybridization, electrophoresis, microarray analysis, genotyping and transcription. Data will also be presented demonstrating improved PCR amplification with inclusion of a polymerase enhancer. Results indicate that technology advances in sample preservation can prevent the degradation process of biological samples used in life science research.

Synchronized Production and Transportation Planning Using Subcontracted Vehicles in a Production-Distribution Network

Effective management of interfaces between procurement, supply, production and distribution for higher efficiency in the supply chain is an important issue in global manufacturing, where the synchronization of production and transportation planning represents important savings in operational costs. This paper focuses on the synchronization of production planning and transportation planning in a production distribution network, where transportation is subcontracted to a professional transportation enterprise (PTE) for vehicle-hiring. Dynamic and flexible numbers of vehicles are used to cater for fast changing market demands. Thus, the number of vehicles to be hired is viewed from the planning point of view as an operational decision considered simultaneously with production and transportation planning. A mathematical model – SPTP/MTDS – for synchronized production and transportation planning under multiple times and direct shipping strategy (MTDS) is discussed, and a Lagrange relaxation decomposition-based two layer decision procedure (LRD-TLDP) is developed. By introducing artificial decision variables and Lagrange multipliers, SPTP/MTDS is decomposed into a production decision sub-problem (SPTP-PD), and a distribution decision sub-problem (SPTP-DD). A priority-based assignment heuristic and a partial chain-based genetic algorithm are developed to solve SPTP-PD and SPTP-DD, respectively. An illustration of the application of the model in an electronic appliance manufacturing enterprise in China is presented.

A framework for analysing long‐range direct shipping logistics

PurposeTo present a decision support system (DSS) enabling the analysis of the cost‐effectiveness of direct‐shipping long‐haul road transport policies, including full truck load (FTL) and less than truck load (LTL) modes, and to select the optimal carrier.Design/methodology/approachAnalytical estimation of transportation costs is provided in a framework including an interactive computer procedure and a dedicated database structure capable of characterizing the logistics system.FindingsMain criticalities of manual logistic planning are: sub‐optimal selection of carrier and excessive use of LTL transport, while the optimal FTL vs LTL trade‐off is not fully explored in practice.Research limitations/implicationsThis is an analysis tool of user‐defined scenarios and does not provide the automatic synthesis of shipments planning. Admittedly, this model does not attempt to optimize the shipping strategy, but to quantitatively assess the effects of the adopted decisions.Practical implicationsAlternative shipping policies can be compared to perform what‐if analyses and explore the outcome of alternative decisions (FTL vs LTL shipping modes) even in terms of transportation expenditures. Allows rapid selection of the optimal motor carrier and assesses the extra cost due to a sub‐optimal choice. Gives the experienced manager a framework for critical assessment of shipping decisions, suggesting improvement areas for cost reduction.Originality/valueWith respect to other software tools for carrier selection provides explicit analysis of extra costs incurred by manual planning, thus becoming a strategic tool for logistic decision making. Furthermore, enables managerial insights to be gained and makes manual planning more effective.

Optimal design for sustainable development of a material recovery facility in a fast-growing urban setting

Installing material recovery facilities (MRFs) in a solid waste management system could be a feasible alternative to achieve sustainable development goals in urban areas if current household and curbside recycling cannot prove successful in the long run. This paper addresses the optimal site selection and capacity planning for a MRF in conjunction with an optimal shipping strategy of solid waste streams in a multi-district urban region. Screening of material recovery and disposal capacity alternatives can be achieved in terms of economic feasibility, technology limitation, recycling potential, and site availability. The optimization objectives include economic impacts characterized by recycling income and cost components for waste management, while the constraint set consists of mass balance, capacity limitation, recycling limitation, scale economy, conditionality, and relevant screening constraints. A case study for the City of San Antonio, Texas (USA) presents a vivid example where scenario planning demonstrates the robustness and flexibility of this modeling analysis. It proves especially useful when determining MRF ownership structure. Each scenario experiences two case settings: (1) two MRF sites are proposed for selection and (2) a single MRF site is sought. Cost analysis confirms processing fees are not the driving force in the City’s operation, but rather shipping cost. Sensitivity analysis solidifies the notion that significant public participation plays the most important role in minimizing solid waste management expenses.

Continuous and Discrete Shipping Strategies for the Single Link Problem

We consider the problem of shipping several products from a common origin to a common destination. Each product is offered at the origin and absorbed at the destination at a given constant rate. The objective of the problem is to determine a shipping strategy that minimizes the sum of the transportation and the inventory costs. We present a general framework of analysis from which we derive the known approaches with a continuous frequency and with a set of given frequencies as particular cases. Moreover, we derive from the general framework a new model for the case with discrete shipping times in which a shipment can take place at each discrete time instant. We prove that the optimal solutions of the three models can be ranked and that the distance between the optimal costs can be unlimited in the worst case. Finally, we evaluate, on the basis of a set of randomly generated problem instances, the "average" distance between the optimal solutions of the models.

Regional shipping strategy assessment based on installing a refuse-derived-fuel process in a municipal incinerator.

The rising prices of raw materials and the concerns of energy recovery have resulted in an increasing interest in processing the waste streams. In recent years, a number of credible surveys have shown that recycling and waste-to-energy processes appear to work well together. Compatibility exists for several reasons related to economic, environmental, political, and social aspects. However, the regional impacts of installing a centralised refused-derived fuel (RDF) process prior to waste-to-energy facilities remain unclear due to the inherent complexity of solid waste composition, generation rate, energy and material recovery goals, and the existing shipping patterns. This paper illustrates a thorough evaluation for a RDF pilot study from both quantitative and qualitative aspects. Such a process, consisting of the standard unit operations of shredding, magnetic separation, trommel screening, and air classification, might be useful for integrating the recycling and presorting efforts with a large-scale municipal incinerator in a region. A series of sampling and analyses of the waste streams were performed in Taipei County, Taiwan in order to characterise its potentials for recycling. Based on the proper estimation of solid waste generation, the goal programming modelling analysis not only focuses on an evaluation of how the waste inflows with different rates of generation, physical and chemical compositions, and heating values in the service areas can be processed by a centralised RDF facility to meet both the energy recovery and throughput requirements in different municipal incinerators but also indicates the optimal shipping pattern associated with several incinerators due to such an installation in a regional sense. A case study designed to explore the regional impacts on shipping patterns in the southwestern of Taipei County, Taiwan verifies the application potential of such a planning methodology.

OPTIMAL SHIPPING STRATEGY OF SOLID WASTE STREAMS BASED ON ENERGY RECOVERY AND THROUGHPUT REQUIREMENTS OF INCINERATION FACILITIES

System analysis for solid waste management has received wide attention from both economic and environmental planners because of the complex nature of these multi-faceted linkages between source generation, collection, recycling, treatment, and disposal. One of the recent issues in the operational program is how to properly handle the impacts due to various solid waste streams generated with varying heating values in different service area, which have to be destined for incineration and disposal. This paper explores a new idea that the optimal shipping strategy could be rearranged or reorganized from time to time with respect to the varying quantity and quality of solid waste streams in order to meet both the energy recovery and throughput requirements simultaneously in a solid waste management system. Through the application of goal programming models, research findings in this paper clearly indicate that such a management strategy may provide flexibility for those metropolitan regions where the problems of rapid growth of solid waste generation, residents' reluctance to adopt recycling activities, and insufficient incineration capacity must be taken into account at one time. A case study for the western Taipei County in Taiwan shows the application potential of such a methodology.

Inventory control on sequences of links with given transportation frequencies

This paper deals with the problem of minimizing the sum of the inventory and transportation costs in the multi-products logistic network with one origin, some intermediate nodes and one destination when a set of possible shipping frequencies is given. The problem is to determine for each link a periodic shipping strategy in order to minimize the total cost. We first propose a mixed integer linear programming model; then we present two more compact formulations of the problem obtained by computing the inventory cost through the aggregation of the inventory over time or over nodes. Finally, we present heuristic algorithms based either on the decomposition of the sequence or on the solution of a simpler problem through dynamic programming techniques.

Fully Loaded Direct Shipping Strategy in One Warehouse/N Retailer Systems without Central Inventories

In this paper, we consider one warehouse/multiple retailer systems with transportation costs. The planning horizon is infinite and the warehouse keeps no central inventory. It is shown that the fully loaded direct shipping strategy is optimal among all possible shipping/allocation strategies if the truck capacity is smaller than a certain quantity, and a bound is provided for the general case.

Logistics diplomacy at Casablanca: The Anglo‐American failure to integrate shipping and military strategy

Logistics diplomacy at Casablanca: The Anglo‐American failure to integrate shipping and military strategy