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

Authors: Hee Jeong Lee, Hyun Jeung Ko, Young Hwan Sohn, Chang Seong Ko

Addresses: Department of Industrial and Management Engineering, Kyungsung University, Daeyeon-dong, Nam-gu, Busan 608-736, Korea. ' Department of Logistics, Kunsan National University, 1170 Daehangno, Kunsan, Jeonbuk 573-701, Korea. ' Defense Technology and Management Center, TechnoValue Co., Ltd., 3rd Fl., White Wave Building, 1720-8 Seocho-3dong, Seocho-gu, Seoul 137-885, Korea. ' Department of Industrial and Management Engineering, Kyungsung University, Daeyeon-dong, Nam-gu, Busan 608-736, Korea

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.

Keywords: incremental profit; reconfiguration; express courier services; courier service networks; consolidation terminals; cut-off times; Korea; integer programming; genetic algorithms.

DOI: 10.1504/IJLSM.2010.032947

International Journal of Logistics Systems and Management, 2010 Vol.6 No.4, pp.442 - 457

Published online: 05 May 2010 *

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