Introduction to Logistics Systems Planning

Logistics is defined as a business planning framework for the management of material, service, information and capital flows. Logistic systems have received considerable attention in the last 10 years, as they constitute one of the cornerstones in the design and control of production systems and the modeling of supply chains. This renewed interest is partly due to the recognition that well-known planning and control systems such as 'Manufacturing Resources Planning' and 'Just in Time' systems fail to establish a sound integration of lead time management, capacity planning and quality considerations.This book uniquely: Presents a balanced treatment of quantitative methods for logistics systems planning, organization and control. Each topic is illustrated with real examples. Each chapter features an annotated bibliography of key references. Features a number of case studies that show how the methods can be applied to complex logistics problems. Assumes only a basic knowledge of operations research. Supported by a Website ( http://wileylogisticsbook.dii.unile.it ) featuring exercises and teaching material. A unique, leading edge title for researchers, practitioners, and students of logistics and supply chain management, in both academia; engineering, computer science, management science, undergraduate, graduate students and industry professionals.

Gianpaolo Ghiani is Associate Professor of Operations Research at the University of Lecce, Italy. His main research interests lie in the field of combinatorial optimization, particularly in vehicle routing, location and layout problems. He has published in a variety of journals, including Mathematical Programming, Operations Research Letters, Networks Transportation Science, Optimization Methods and Software, Computers and Operations Research, International Transactions in Operational research, European Journal of Operational Research, Journal of the Operational Research Society, Parallel Computing and Journal of Intelligent Manufacturing Systems. His doctoral thesis was awarded the Transportation Science Dissertation Award from INFORMS in 1998. He is an editorial board member of Computers & Operations Research. Gilbert Laporte obtained his PhD in Operations Research at the London School of Economics in 1975. He is Professor of Operations Research at HEC Montréal, Director of the Canada Research Chair in Distribution Management, and Adjunct Professor at the University of Alberta. He is also a member of GERAD, of the Centre for Research on Transportation (serving as director from 1987 to 1991), and Fellow of the Center for Management of Operations and Logistics, University of Texas at Austin. He has authored or coauthored several books, as well as more then 225 scientific articles in combinatorial optimization, mostly in the areas of vehicle routing, location, districting and timetabling. He is the current editor of Computers and Operations Research and served as editor of Transportation Science from 1995 to 2002. He has received many scientific awards including the Pergamon Prize (United Kingdom), the Merit Award of the Canadian Operational Research Society, the CORS Practice Prize on two occasions, the Jacques-Rousseau Prize for Interdisciplinary, as well as the President's medal of the Operational Research Society (United Kingdom). In 1998 he became a member of the Royal Society of Canada. Roberto Musmanno is Professor of Operations Research at the University of Calabria, Italy. His major research interests lie in logistics, network optimization and parallel computing. He has published n a variety of journals, including Operations Research, Transportation Science, Computational Optimization and Applications, Optimization Methods & Software, Journal of Optimization Theory and Applications, Optimization and Parallel Computing. He is also a member of the Scientific Committee of the Italian Center of Excellence of High Performance Computing, and an editorial board member of Computers & Operations Research.

Foreword.

Preface.

Abbreviations.

Problems and Website.

Acknowledgements.

About the Authors.

1 Introducing Logistics Systems.

1.1 Introduction.

1.2 How Logistics Systems Work.

1.2.1 Order processing.

1.2.2 Inventory management.

1.2.3 Freight transportation.

1.3 Logistics Managerial Issues.

1.4 Emerging Trends in Logistics.

1.5 Logistics Decisions.

1.5.1 Decision support methods.

1.5.2 Outline of the book.

1.6 Questions and Problems.

1.7 Annotated Bibliography.

2 Forecasting Logistics Requirements.

2.1 Introduction.

2.2 Demand Forecasting Methods.

2.2.1 Qualitative methods.

2.2.2 Quantitative methods.

2.2.3 Notation.

2.3 Causal Methods.

2.4 Time Series Extrapolation.

2.4.1 Time series decomposition method.

2.5 Further Time Series Extrapolation Methods: the Constant Trend Case.

2.5.1 Elementary technique.

2.5.2 Moving average method.

2.5.3 Exponential smoothing method.

2.5.4 Choice of the smoothing constant.

2.5.5 The demand forecasts for the subsequent time periods.

2.6 Further Time Series Extrapolation Methods: the Linear Trend Case.

2.6.1 Elementary technique.

2.6.2 Linear regression method.

2.6.3 Double moving average method.

2.6.4 The Holt method.

2.7 Further Time Series Extrapolation Methods: the Seasonal Effect Case.

2.7.1 Elementary technique.

2.7.2 Revised exponential smoothing method.

2.7.3 The Winters method.

2.8 Advanced Forecasting Methods.

2.9 Selection and Control of Forecasting Methods.

2.9.1 Accuracy measures.

2.9.2 Forecast control.

2.10 Questions and Problems.

2.11 Annotated Bibliography.

3 Designing the Logistics Network.

3.1 Introduction.

3.2 Classification of Location Problems.

3.3 Single-Echelon Single-Commodity Location Models.

3.3.1 Linear transportation costs and facility fixed costs.

3.3.2 Linear transportation costs and concave piecewise linear facility operating costs.

3.4 Two-Echelon Multicommodity Location Models.

3.5 Logistics Facility Location in the Public Sector.

3.5.1 p-centre models.

3.5.2 The location-covering model.

3.6 Data Aggregation.

3.7 Questions and Problems.

3.8 Annotated Bibliography.

4 Solving Inventory Management Problems.

4.1 Introduction.

4.2 Relevant Costs.

4.3 Classification of Inventory Management Models.

4.4 Single Stocking Point: Single-Commodity Inventory Models under Constant Demand Rate.

4.4.1 Noninstantaneous resupply.

4.4.2 Instantaneous resupply.

4.4.3 Reorder point.

4.5 Single Stocking Point: Single-Commodity Inventory Models under Deterministic Time-Varying Demand Rate.

4.6 Models with Discounts.

4.6.1 Quantity-discounts-on-all-units.

4.6.2 Incremental quantity discounts.

4.7 Single Stocking Point: Multicommodity Inventory Models.

4.7.1 Models with capacity constraints.

4.7.2 Models with joint costs.

4.8 Stochastic Models.

4.8.1 The Newsboy Problem.

4.8.2 The (s, S) policy for single period problems.

4.8.3 The reorder point policy.

4.8.4 The periodic review policy.

4.8.5 The (s, S) policy.

4.8.6 The two-bin policy.

4.9 Selecting an Inventory Policy.

4.10 Multiple Stocking Point Models.

4.11 Slow-Moving Item Models.

4.12 Policy Robustness.

4.13 Questions and Problems.

4.14 Annotated Bibliography.

5 Designing and Operating a Warehouse.

5.1 Introduction.

5.1.1 Internal warehouse structure and operations.

5.1.2 Storage media.

5.1.3 Storage/retrieval transport mechanisms and policies.

5.1.4 Decisions support methodologies.

5.2 Warehouse Design.

5.2.1 Selecting the storage medium and the storage/retrieval transport mechanism.

5.2.2 Sizing the receiving and shipment subsystems.

5.2.3 Sizing the storage subsystems.

5.3 Tactical Decisions.

5.3.1 Product allocation.

5.4 Operational Decisions.

5.4.1 Batch formation.

5.4.2 Order picker routing.

5.4.3 Packing problems.

5.5 Questions and Problems.

5.6 Annotated Bibliography.

6 Planning and Managing Long-Haul Freight Transportation.

6.1 Introduction.

6.2 Relevant Costs.

6.3 Classification of Transportation Problems.

6.4 Fleet Composition.

6.5 Freight Traffic Assignment Problems.

6.5.1 Minimum-cost flow formulation.

6.5.2 Linear single-commodity minimum-cost flow problems.

6.5.3 Linear multicommodity minimum-cost flow problems.

6.6 Service Network Design Problems.

6.6.1 Fixed-charge network design models.

6.6.2 The linear fixed-charge network design model.

6.7 Shipment Consolidation and Dispatching.

6.8 Freight Terminal Design and Operations.

6.8.1 Design issues.

6.8.2 Tactical and operational issues.

6.9 Vehicle Allocation Problems.

6.10 The Dynamic Driver Assignment Problem.

6.11 Questions and Problems.

6.12 Annotated Bibliography.

7 Planning and Managing Short-Haul Freight Transportation.

7.1 Introduction.

7.2 Vehicle Routing Problems.

7.3 The Travelling Salesman Problem.

7.3.1 The asymmetric travelling salesman problem.

7.3.2 The symmetric travelling salesman problem.

7.4 The Node Routing Problem with Capacity and Length Constraints.

7.4.1 Constructive heuristics.

7.5 The Node Routing and Scheduling Problem with TimeWindows.

7.5.1 An insertion heuristic.

7.5.2 A unified tabu search procedure for constrained node routing problems.

7.6 Arc Routing Problems.

7.6.1 The Chinese postman problem.

7.6.2 The rural postman problem 286

7.7 Real-Time Vehicle Routing and Dispatching.

7.8 Integrated Location and Routing.

7.9 Vendor-Managed Inventory Routing.

7.10 Questions and Problems.

7.11 Annotated Bibliography.

8 Linking Theory to Practice.

8.1 Introduction.

8.2 Shipment Consolidation and Dispatching at ExxonMobil Chemical.

8.3 Distribution Management at Pfizer.

8.3.1 The Logistics System.

8.3.2 The Italian ALFA10 distribution system.

8.4 Freight Rail Transportation at Railion.

8.5 Yard Management at the Gioia Tauro Marine Terminal.

8.6 Municipal Solid Waste Collection and Disposal Management at the Regional Municipality of Hamilton-Wentworth.

8.7 Demand Forecasting at Adriatica Accumulatori.

8.8 Distribution Logistics Network Design at DowBrands.

8.9 ContainerWarehouse Location at Hardcastle.

8.10 Inventory Management atWolferine.

8.11 Airplane Loading at FedEx.

8.12 Container Loading atWaterworld.

8.12.1 Packing rolls into containers.

8.12.2 Packing pallets into containers.

8.13 Air Network Design at Intexpress.

8.14 Bulk-Cargo Ship Scheduling Problem at the US Navy.

8.15 Meter Reader Routing and Scheduling at Socal.

8.16 Annotated Bibliography.

8.17 Further Case Studies.

Index.

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Introduction to Logistics Systems Planning and Control

Summary

Author Biography

Table of Contents

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