Determine the optimal carrier selection for a logistics network based on multi-commodity reliability criterion

Abstract

From the perspective of supply chain management, the selected carrier plays an important role in freight delivery. This article proposes a new criterion of multi-commodity reliability and optimises the carrier selection based on such a criterion for logistics networks with routes and nodes, over which multiple commodities are delivered. Carrier selection concerns the selection of exactly one carrier to deliver freight on each route. The capacity of each carrier has several available values associated with a probability distribution, since some of a carrier's capacity may be reserved for various orders. Therefore, the logistics network, given any carrier selection, is a multi-commodity multi-state logistics network. Multi-commodity reliability is defined as a probability that the logistics network can satisfy a customer's demand for various commodities, and is a performance indicator for freight delivery. To solve this problem, this study proposes an optimisation algorithm that integrates genetic algorithm, minimal paths and Recursive Sum of Disjoint Products. A practical example in which multi-sized LCD monitors are delivered from China to Germany is considered to illustrate the solution procedure.

Keywords:

• multi-commodity reliability
• multi-commodity multi-state logistics network
• optimal carrier selection
• available capacity
• genetic algorithm
• recursive sum of disjoint products

Acknowledgements

This study was supported in part by the National Science Council, Taiwan, Republic of China, under Grant no. NSC 98-2221-E-011-051-MY3.