6 managing freight transport - wiley · 2013. 6. 5. · 6 managing freight transport case study:...

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6 Managing freight transport 6.1 Introduction 6.2 Freight traffic assignment problems 6.3 Service network design problems 6.4 Vehicle allocation problems 6.5 A dynamic driver assignment problem 6.6 Fleet composition 6.7 Shipment consolidation 6.8 Vehicle routing problems 6.9 Real-time vehicle routing problems 6.10 Integrated location and routing problems 6.11 Vendor-managed inventory routing 6.12 Case study: Air network design at Intexpress 6.13 Case study: Meter reader routing and scheduling at Socal 6.14 Case study: Dynamic vehicle-dispatching problem with pickups and deliveries at eCourier 6.15 Questions and problems G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 1 / 26

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Page 1: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport6.1 Introduction6.2 Freight traffic assignment problems6.3 Service network design problems6.4 Vehicle allocation problems6.5 A dynamic driver assignment problem6.6 Fleet composition6.7 Shipment consolidation6.8 Vehicle routing problems6.9 Real-time vehicle routing problems

6.10 Integrated location and routing problems6.11 Vendor-managed inventory routing6.12 Case study: Air network design at Intexpress6.13 Case study: Meter reader routing and scheduling at Socal6.14 Case study: Dynamic vehicle-dispatching problem with pickups

and deliveries at eCourier6.15 Questions and problems

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 1 / 26

Page 2: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Intexpress

- core business: express freight delivery in North America;- part of the transport activities performed by plane;- services offered to the customers:

> delivery within 24 hours;> delivery within 48 hours;> delivery within three to five days.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 26

Page 3: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Intexpress

- core business: express freight delivery in North America;- part of the transport activities performed by plane;- services offered to the customers:

> delivery within 24 hours;> delivery within 48 hours;> delivery within three to five days.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 26

Page 4: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Intexpress

- core business: express freight delivery in North America;- part of the transport activities performed by plane;- services offered to the customers:

> delivery within 24 hours;> delivery within 48 hours;> delivery within three to five days.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 26

Page 5: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Intexpress

- core business: express freight delivery in North America;- part of the transport activities performed by plane;- services offered to the customers:

> delivery within 24 hours;> delivery within 48 hours;> delivery within three to five days.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 26

Page 6: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Intexpress

- core business: express freight delivery in North America;- part of the transport activities performed by plane;- services offered to the customers:

> delivery within 24 hours;> delivery within 48 hours;> delivery within three to five days.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 26

Page 7: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Intexpress

- core business: express freight delivery in North America;- part of the transport activities performed by plane;- services offered to the customers:

> delivery within 24 hours;> delivery within 48 hours;> delivery within three to five days.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 26

Page 8: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 9: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 10: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 11: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 12: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 13: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 14: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 15: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 16: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 17: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 18: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 19: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Logistics system- Made of:

> shipment centres (SCs);> a single hub;> a fleet of airplanes;> a fleet of trucks.

- Flight transport services provided by:> a company-owned fleet of cargo airplanes;> commercial airplanes.

- Ground transport guaranteed by a fleet of trucks;- loads consolidated both in the SCs and in the hub;- goods originating from the same SC are transported as a

single load to the hub;- goods assigned to the same SC are sent jointly from the

hub.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 26

Page 20: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (1/4)

- An initial SC and a final SC are associated to eachtransport service request from an origin to a destination;

- freight is:> first transported to the origin, where it is consolidated;> then transported to the final SC by air, by truck (ground

service) or by using a combination of the two modes;> moved from the final SC to the destination by truck.

- SC-to-SC transfer by truck is feasible only if the distancedoes not exceed a given threshold.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 26

Page 21: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (1/4)

- An initial SC and a final SC are associated to eachtransport service request from an origin to a destination;

- freight is:> first transported to the origin, where it is consolidated;> then transported to the final SC by air, by truck (ground

service) or by using a combination of the two modes;> moved from the final SC to the destination by truck.

- SC-to-SC transfer by truck is feasible only if the distancedoes not exceed a given threshold.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 26

Page 22: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (1/4)

- An initial SC and a final SC are associated to eachtransport service request from an origin to a destination;

- freight is:> first transported to the origin, where it is consolidated;> then transported to the final SC by air, by truck (ground

service) or by using a combination of the two modes;> moved from the final SC to the destination by truck.

- SC-to-SC transfer by truck is feasible only if the distancedoes not exceed a given threshold.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 26

Page 23: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (1/4)

- An initial SC and a final SC are associated to eachtransport service request from an origin to a destination;

- freight is:> first transported to the origin, where it is consolidated;> then transported to the final SC by air, by truck (ground

service) or by using a combination of the two modes;> moved from the final SC to the destination by truck.

- SC-to-SC transfer by truck is feasible only if the distancedoes not exceed a given threshold.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 26

Page 24: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (1/4)

- An initial SC and a final SC are associated to eachtransport service request from an origin to a destination;

- freight is:> first transported to the origin, where it is consolidated;> then transported to the final SC by air, by truck (ground

service) or by using a combination of the two modes;> moved from the final SC to the destination by truck.

- SC-to-SC transfer by truck is feasible only if the distancedoes not exceed a given threshold.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 26

Page 25: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (1/4)

- An initial SC and a final SC are associated to eachtransport service request from an origin to a destination;

- freight is:> first transported to the origin, where it is consolidated;> then transported to the final SC by air, by truck (ground

service) or by using a combination of the two modes;> moved from the final SC to the destination by truck.

- SC-to-SC transfer by truck is feasible only if the distancedoes not exceed a given threshold.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 26

Page 26: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 27: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 28: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 29: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 30: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 31: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 32: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 33: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 34: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (2/4)- Outgoing freight picked up in the late afternoon from the

origin and delivered in the morning of the following day;- company-owned aircraft performs three daily operations:

> leaves the hub;> makes a set of deliveries;> travels empty from the last delivery point to the first

pickup point, where it makes a set of pickups and finallygoes back to the hub.

- Arrivals at the hub must take place before a pre-establishedarrival time (cut-off time, or COT), in such a way that theloads arriving in incoming airplanes can be:

> unloaded;> sorted by destination;> quickly reloaded on the outgoing aircraft.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 26

Page 35: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (3/4)

- Each SC is characterized by:> an ‘earliest pickup time’;> a ‘latest delivery time’.

- Not economically desirable or technically feasible forairplanes to visit all SCs;

- a subset of SCs must be selected as aircraft loading andunloading points (AS, air-stop);

- SC that is not an AS is connected to an AS by truck (Figure1: possible freight route between an origin-destination pair).

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 26

Page 36: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (3/4)

- Each SC is characterized by:> an ‘earliest pickup time’;> a ‘latest delivery time’.

- Not economically desirable or technically feasible forairplanes to visit all SCs;

- a subset of SCs must be selected as aircraft loading andunloading points (AS, air-stop);

- SC that is not an AS is connected to an AS by truck (Figure1: possible freight route between an origin-destination pair).

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 26

Page 37: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (3/4)

- Each SC is characterized by:> an ‘earliest pickup time’;> a ‘latest delivery time’.

- Not economically desirable or technically feasible forairplanes to visit all SCs;

- a subset of SCs must be selected as aircraft loading andunloading points (AS, air-stop);

- SC that is not an AS is connected to an AS by truck (Figure1: possible freight route between an origin-destination pair).

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 26

Page 38: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (3/4)

- Each SC is characterized by:> an ‘earliest pickup time’;> a ‘latest delivery time’.

- Not economically desirable or technically feasible forairplanes to visit all SCs;

- a subset of SCs must be selected as aircraft loading andunloading points (AS, air-stop);

- SC that is not an AS is connected to an AS by truck (Figure1: possible freight route between an origin-destination pair).

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Transport service (3/4)

- Each SC is characterized by:> an ‘earliest pickup time’;> a ‘latest delivery time’.

- Not economically desirable or technically feasible forairplanes to visit all SCs;

- a subset of SCs must be selected as aircraft loading andunloading points (AS, air-stop);

- SC that is not an AS is connected to an AS by truck (Figure1: possible freight route between an origin-destination pair).

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 26

Page 40: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (3/4)

- Each SC is characterized by:> an ‘earliest pickup time’;> a ‘latest delivery time’.

- Not economically desirable or technically feasible forairplanes to visit all SCs;

- a subset of SCs must be selected as aircraft loading andunloading points (AS, air-stop);

- SC that is not an AS is connected to an AS by truck (Figure1: possible freight route between an origin-destination pair).

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 26

Page 41: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Transport service (4/4)

AS

Shift with dedicated aircraft Origin

SC

Hub

Destination

AS

SC

AS

AS

AS

Consolidated land shift

Local pick-up and delivery

Figure 1: A possible freight route between an origin–destination pairat Intexpress.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 7 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Commercial air service

- Its cost depends on the freight quantity;- low reliability;- used when at least one of the following conditions occurs:

> the distance between the origin of the route and theclosest SC is so large that it is not possible to perform aquick ground connection;

> the company’s owned airplanes have an insufficientcapacity to satisfy its entire air transport demand;

> it is not possible to provide an adequate service amongthe origin-destination pairs by using thecompany-owned trucks.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 8 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Commercial air service

- Its cost depends on the freight quantity;- low reliability;- used when at least one of the following conditions occurs:

> the distance between the origin of the route and theclosest SC is so large that it is not possible to perform aquick ground connection;

> the company’s owned airplanes have an insufficientcapacity to satisfy its entire air transport demand;

> it is not possible to provide an adequate service amongthe origin-destination pairs by using thecompany-owned trucks.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 8 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Commercial air service

- Its cost depends on the freight quantity;- low reliability;- used when at least one of the following conditions occurs:

> the distance between the origin of the route and theclosest SC is so large that it is not possible to perform aquick ground connection;

> the company’s owned airplanes have an insufficientcapacity to satisfy its entire air transport demand;

> it is not possible to provide an adequate service amongthe origin-destination pairs by using thecompany-owned trucks.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 8 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Commercial air service

- Its cost depends on the freight quantity;- low reliability;- used when at least one of the following conditions occurs:

> the distance between the origin of the route and theclosest SC is so large that it is not possible to perform aquick ground connection;

> the company’s owned airplanes have an insufficientcapacity to satisfy its entire air transport demand;

> it is not possible to provide an adequate service amongthe origin-destination pairs by using thecompany-owned trucks.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 8 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Commercial air service

- Its cost depends on the freight quantity;- low reliability;- used when at least one of the following conditions occurs:

> the distance between the origin of the route and theclosest SC is so large that it is not possible to perform aquick ground connection;

> the company’s owned airplanes have an insufficientcapacity to satisfy its entire air transport demand;

> it is not possible to provide an adequate service amongthe origin-destination pairs by using thecompany-owned trucks.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 8 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Planning the service network

- Consists of detemining:> the set of ASs served by each aircraft of the company;> truck routes linking SCs (which are not ASs) to ASs;> the transport tasks performed by commercial airlines.

- Objective: minimization of the operational cost subject to‘earliest pickup time’ and ‘latest delivery time’ constraints atSCs, to the COT restriction and so on.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 9 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Planning the service network

- Consists of detemining:> the set of ASs served by each aircraft of the company;> truck routes linking SCs (which are not ASs) to ASs;> the transport tasks performed by commercial airlines.

- Objective: minimization of the operational cost subject to‘earliest pickup time’ and ‘latest delivery time’ constraints atSCs, to the COT restriction and so on.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 9 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Planning the service network

- Consists of detemining:> the set of ASs served by each aircraft of the company;> truck routes linking SCs (which are not ASs) to ASs;> the transport tasks performed by commercial airlines.

- Objective: minimization of the operational cost subject to‘earliest pickup time’ and ‘latest delivery time’ constraints atSCs, to the COT restriction and so on.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 9 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Planning the service network

- Consists of detemining:> the set of ASs served by each aircraft of the company;> truck routes linking SCs (which are not ASs) to ASs;> the transport tasks performed by commercial airlines.

- Objective: minimization of the operational cost subject to‘earliest pickup time’ and ‘latest delivery time’ constraints atSCs, to the COT restriction and so on.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 9 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Planning the service network

- Consists of detemining:> the set of ASs served by each aircraft of the company;> truck routes linking SCs (which are not ASs) to ASs;> the transport tasks performed by commercial airlines.

- Objective: minimization of the operational cost subject to‘earliest pickup time’ and ‘latest delivery time’ constraints atSCs, to the COT restriction and so on.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 9 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Solution method

Two stages:

- first stage: the size of the problem is reduced, according toa qualitative analysis;

- second stage: the reduced problem is formulated andsolved as an IP model.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 10 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Solution method

Two stages:

- first stage: the size of the problem is reduced, according toa qualitative analysis;

- second stage: the reduced problem is formulated andsolved as an IP model.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 10 / 26

Page 54: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Solution method

Two stages:

- first stage: the size of the problem is reduced, according toa qualitative analysis;

- second stage: the reduced problem is formulated andsolved as an IP model.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 10 / 26

Page 55: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

First stage

- origin-destination pairs that can be serviced by truck (insuch a way that all operational constraints are satisfied) areallocated to this mode and are not considered afterwards;

- origin-destination pairs that cannot be served feasibly by adedicated aircraft or by truck are assigned to thecommercial flights;low-priority services (deliveries within 48 hours or withinthree to five days) are made by truck, or by using theresidual capacity of the company-owned aircraft;the demands of origin and destination sites areconcentrated in the associated SC.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 11 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

First stage

- origin-destination pairs that can be serviced by truck (insuch a way that all operational constraints are satisfied) areallocated to this mode and are not considered afterwards;

- origin-destination pairs that cannot be served feasibly by adedicated aircraft or by truck are assigned to thecommercial flights;low-priority services (deliveries within 48 hours or withinthree to five days) are made by truck, or by using theresidual capacity of the company-owned aircraft;the demands of origin and destination sites areconcentrated in the associated SC.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 11 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

First stage

- origin-destination pairs that can be serviced by truck (insuch a way that all operational constraints are satisfied) areallocated to this mode and are not considered afterwards;

- origin-destination pairs that cannot be served feasibly by adedicated aircraft or by truck are assigned to thecommercial flights;low-priority services (deliveries within 48 hours or withinthree to five days) are made by truck, or by using theresidual capacity of the company-owned aircraft;the demands of origin and destination sites areconcentrated in the associated SC.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 11 / 26

Page 58: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

First stage

- origin-destination pairs that can be serviced by truck (insuch a way that all operational constraints are satisfied) areallocated to this mode and are not considered afterwards;

- origin-destination pairs that cannot be served feasibly by adedicated aircraft or by truck are assigned to thecommercial flights;low-priority services (deliveries within 48 hours or withinthree to five days) are made by truck, or by using theresidual capacity of the company-owned aircraft;the demands of origin and destination sites areconcentrated in the associated SC.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 11 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Route- Partial solution characterized by:

> a sequence of stops of a company-owned aircraftending or beginning at the hub (depending on whetherit is a collection or delivery route);

> a set of SCs (not ASs) allocated to each aircraft AS.- Two routes visiting the same AS in the same order can

differ because of the set of SCs (which are not ASs), orbecause of the allocation of these SCs to the ASs;

- if the demand of a route exceeds the capacity of theallocated aircraft, the exceeding demand is transported bycommercial flights;

- cost of a route: sum of costs associated with air transport,land transport and possibly a commercial flight if demandexceeds the dedicated aircraft capacity.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 12 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Route- Partial solution characterized by:

> a sequence of stops of a company-owned aircraftending or beginning at the hub (depending on whetherit is a collection or delivery route);

> a set of SCs (not ASs) allocated to each aircraft AS.- Two routes visiting the same AS in the same order can

differ because of the set of SCs (which are not ASs), orbecause of the allocation of these SCs to the ASs;

- if the demand of a route exceeds the capacity of theallocated aircraft, the exceeding demand is transported bycommercial flights;

- cost of a route: sum of costs associated with air transport,land transport and possibly a commercial flight if demandexceeds the dedicated aircraft capacity.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 12 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Route- Partial solution characterized by:

> a sequence of stops of a company-owned aircraftending or beginning at the hub (depending on whetherit is a collection or delivery route);

> a set of SCs (not ASs) allocated to each aircraft AS.- Two routes visiting the same AS in the same order can

differ because of the set of SCs (which are not ASs), orbecause of the allocation of these SCs to the ASs;

- if the demand of a route exceeds the capacity of theallocated aircraft, the exceeding demand is transported bycommercial flights;

- cost of a route: sum of costs associated with air transport,land transport and possibly a commercial flight if demandexceeds the dedicated aircraft capacity.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 12 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Route- Partial solution characterized by:

> a sequence of stops of a company-owned aircraftending or beginning at the hub (depending on whetherit is a collection or delivery route);

> a set of SCs (not ASs) allocated to each aircraft AS.- Two routes visiting the same AS in the same order can

differ because of the set of SCs (which are not ASs), orbecause of the allocation of these SCs to the ASs;

- if the demand of a route exceeds the capacity of theallocated aircraft, the exceeding demand is transported bycommercial flights;

- cost of a route: sum of costs associated with air transport,land transport and possibly a commercial flight if demandexceeds the dedicated aircraft capacity.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 12 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Route- Partial solution characterized by:

> a sequence of stops of a company-owned aircraftending or beginning at the hub (depending on whetherit is a collection or delivery route);

> a set of SCs (not ASs) allocated to each aircraft AS.- Two routes visiting the same AS in the same order can

differ because of the set of SCs (which are not ASs), orbecause of the allocation of these SCs to the ASs;

- if the demand of a route exceeds the capacity of theallocated aircraft, the exceeding demand is transported bycommercial flights;

- cost of a route: sum of costs associated with air transport,land transport and possibly a commercial flight if demandexceeds the dedicated aircraft capacity.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 12 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Route- Partial solution characterized by:

> a sequence of stops of a company-owned aircraftending or beginning at the hub (depending on whetherit is a collection or delivery route);

> a set of SCs (not ASs) allocated to each aircraft AS.- Two routes visiting the same AS in the same order can

differ because of the set of SCs (which are not ASs), orbecause of the allocation of these SCs to the ASs;

- if the demand of a route exceeds the capacity of theallocated aircraft, the exceeding demand is transported bycommercial flights;

- cost of a route: sum of costs associated with air transport,land transport and possibly a commercial flight if demandexceeds the dedicated aircraft capacity.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 12 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 67: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 68: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 69: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 70: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 71: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 72: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 73: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

Page 74: 6 Managing freight transport - Wiley · 2013. 6. 5. · 6 Managing freight transport Case study: Air network design at Intexpress Intexpress - core business: express freight delivery

6 Managing freight transport Case study: Air network design at Intexpress

Second stage (1/11)- K : set of available airplane types;- Uk , k ∈K : set of the pickup routes that can be assigned to

an airplane of type k ;- Vk , k ∈K : set of the delivery routes that can be assigned to

an airplane of type k ;- R: set of all routes (R =

k∈K(Uk

∪Vk ));

- nk , k ∈K : number of company-owned airplanes k ;- S: set of SCs;- oi, i ∈S: demand originating at the ith SC;- di, i ∈S: demand whose destination is the i th SC;- cr , r ∈R: cost of route r ;- qi, i ∈S: cost paid if the whole demand oi is transported by

a commercial flight.G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 13 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (2/11)- si, i ∈S: cost paid if the whole demand di is transported by

a commercial flight;- αr

i , i ∈S, r ∈R: binary constant equal to 1 if route r includespicking up traffic at the i th SC, 0 otherwise;

- δri , i ∈S, r ∈R: binary constant equal to 1 if route r includes

delivering traffic to the i th SC, 0 otherwise;- γr

i , i ∈S, r ∈R: binary constant equal to 1 if the first (last)AS of pickup (delivery) route r is the i th SC, 0 otherwise;

- vi, i ∈S: binary decision variable equal to 1 if demand oi istransported by commercial flight, 0 otherwise;

- wi, i ∈S: binary decision variable equal to 1 if demand di istransported by commercial flight, 0 otherwise;

- xr , r ∈R: binary decision variable equal to 1 if (pickup ordelivery) route r is selected.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 14 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (3/11)

Minimize∑

r∈Rcrxr +

i∈S(qivi +siwi) (1)

subject to∑

k∈K

r∈Ukxrα

ri +vi = 1, i ∈S (2)

k∈K

r∈Vkxrδ

ri +wi = 1, i ∈S (3)

r∈Ukxrγ

ri −

r∈Vkxrγ

ri = 0, i ∈S , k ∈K (4)

r∈Ukxr ≤ nk

, k ∈K (5)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 15 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (4/11)

xr ∈F , r ∈R (6)xr ∈ {0,1}, r ∈R (7)vi ∈ {0,1}, i ∈S (8)wi ∈ {0,1}, i ∈S (9)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 16 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (5/11)- Objective function (1): total transport and handling cost;- constraints (2), (3): each SC is served by a dedicated route

or by a commercial route;- constraints (4): if a delivery route of type k ∈K ends in SC i,

i ∈S, then there is a pickup route of the same kindbeginning in i;

- constraints (5): upper bounds on the number of routeswhich can be selected for each dedicated aircraft type;

- constraints (6):> arrivals of the airplanes at the hub must be staggered

in the period before the COT because of the availablepersonnel and of the runway capacity;

> departures from the hub must be scheduled in order toavoid congestion on the runways.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 17 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (6/11)

Constraints (6)

- na : number of time intervals in which the arrivals should beallocated;

- np: number of time intervals in which the departures shouldbe allocated;

- fr , r ∈R: demand along route r ;- at : maximum demand which can arrive to the hub in interval

t , . . . ,na ;- TAt : set of routes with arrival time from t on;- TPt : set of routes with departure time before t ;- pt : the maximum number of airplanes able to leave before t .

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 18 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (7/11)

Constraints (6)

k∈K

r∈Uk∩TAt

frxr ≤ at , t = 1, . . . ,na (10)

k∈K

r∈Vk∩TPt

xr ≤ pt , t = 1, . . . ,np . (11)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 19 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (7/11)

Constraints (6)

k∈K

r∈Uk∩TAt

frxr ≤ at , t = 1, . . . ,na (10)

k∈K

r∈Vk∩TPt

xr ≤ pt , t = 1, . . . ,np . (11)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 19 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (8/11)

- Constraints (10): total demand arriving cannot exceed thehub capacity in the time intervals from t until na ;

- constraints (11): total number of airplanes leaving the hubis less than or equal to the maximum number allowed byrunaway capacity in each time interval t , t = 1, . . . ,np.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 20 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (8/11)

- Constraints (10): total demand arriving cannot exceed thehub capacity in the time intervals from t until na ;

- constraints (11): total number of airplanes leaving the hubis less than or equal to the maximum number allowed byrunaway capacity in each time interval t , t = 1, . . . ,np.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 20 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (9/11)Other possible constraints

- Once a container becomes empty it is brought back to theoriginating SC;

- to this end, the aircraft arriving at an SC and the aircraftleaving it must be compatible;

- four types of aircraft: 1 (compatible with type 1 or 2), 2(compatible with type 1, 2 and 3), 3, 4:

r∈U1xrα

ri +

r∈V1∪V2

xrδri ≥ 0, i ∈S (12)

r∈U1∪U2

xrαri −

r∈V1xrδ

ri ≥ 0, i ∈S (13)

r∈U2xrα

ri +

r∈V1∪V2

∪V3xrδ

ri ≥ 0, i ∈S (14)

r∈U1∪U2

∪U3xrα

ri −

r∈V2xrδ

ri ≥ 0, i ∈S . (15)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 21 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (9/11)Other possible constraints

- Once a container becomes empty it is brought back to theoriginating SC;

- to this end, the aircraft arriving at an SC and the aircraftleaving it must be compatible;

- four types of aircraft: 1 (compatible with type 1 or 2), 2(compatible with type 1, 2 and 3), 3, 4:

r∈U1xrα

ri +

r∈V1∪V2

xrδri ≥ 0, i ∈S (12)

r∈U1∪U2

xrαri −

r∈V1xrδ

ri ≥ 0, i ∈S (13)

r∈U2xrα

ri +

r∈V1∪V2

∪V3xrδ

ri ≥ 0, i ∈S (14)

r∈U1∪U2

∪U3xrα

ri −

r∈V2xrδ

ri ≥ 0, i ∈S . (15)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 21 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (9/11)Other possible constraints

- Once a container becomes empty it is brought back to theoriginating SC;

- to this end, the aircraft arriving at an SC and the aircraftleaving it must be compatible;

- four types of aircraft: 1 (compatible with type 1 or 2), 2(compatible with type 1, 2 and 3), 3, 4:

r∈U1xrα

ri +

r∈V1∪V2

xrδri ≥ 0, i ∈S (12)

r∈U1∪U2

xrαri −

r∈V1xrδ

ri ≥ 0, i ∈S (13)

r∈U2xrα

ri +

r∈V1∪V2

∪V3xrδ

ri ≥ 0, i ∈S (14)

r∈U1∪U2

∪U3xrα

ri −

r∈V2xrδ

ri ≥ 0, i ∈S . (15)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 21 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (9/11)Other possible constraints

- Once a container becomes empty it is brought back to theoriginating SC;

- to this end, the aircraft arriving at an SC and the aircraftleaving it must be compatible;

- four types of aircraft: 1 (compatible with type 1 or 2), 2(compatible with type 1, 2 and 3), 3, 4:

r∈U1xrα

ri +

r∈V1∪V2

xrδri ≥ 0, i ∈S (12)

r∈U1∪U2

xrαri −

r∈V1xrδ

ri ≥ 0, i ∈S (13)

r∈U2xrα

ri +

r∈V1∪V2

∪V3xrδ

ri ≥ 0, i ∈S (14)

r∈U1∪U2

∪U3xrα

ri −

r∈V2xrδ

ri ≥ 0, i ∈S . (15)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 21 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (9/11)Other possible constraints

- Once a container becomes empty it is brought back to theoriginating SC;

- to this end, the aircraft arriving at an SC and the aircraftleaving it must be compatible;

- four types of aircraft: 1 (compatible with type 1 or 2), 2(compatible with type 1, 2 and 3), 3, 4:

r∈U1xrα

ri +

r∈V1∪V2

xrδri ≥ 0, i ∈S (12)

r∈U1∪U2

xrαri −

r∈V1xrδ

ri ≥ 0, i ∈S (13)

r∈U2xrα

ri +

r∈V1∪V2

∪V3xrδ

ri ≥ 0, i ∈S (14)

r∈U1∪U2

∪U3xrα

ri −

r∈V2xrδ

ri ≥ 0, i ∈S . (15)

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 21 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (10/11)

Other possible constraints

- Some airplanes cannot land at certain SCs because ofnoise restrictions or insufficient runaway length;

- removal of the routes r ∈R including a stop at anincompatible SC.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 22 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (10/11)

Other possible constraints

- Some airplanes cannot land at certain SCs because ofnoise restrictions or insufficient runaway length;

- removal of the routes r ∈R including a stop at anincompatible SC.

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (10/11)

Other possible constraints

- Some airplanes cannot land at certain SCs because ofnoise restrictions or insufficient runaway length;

- removal of the routes r ∈R including a stop at anincompatible SC.

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (11/11)

Variables in model (1)– (5), (7)– (15): numerous even if theproblem is of small size.

Example. In case of four ASs (a, b, c and d): 24 pickup routes(abcd, acbd, adbc etc.), each of which has a different cost andarrival time at the hub. If two SCs (e and f ) are connected bytruck to one of the ASs a, b, c and d, then the number ofpossible routes: 16×24= 384 (for each AS sequence, each ofthe two SCs e and f can be connected independently by land toa, b, c or d). For each delivery route making its last stop at anAS d, one must consider the route making its last stop at adifferent SC g ∈S \ {d}. Some of the routes can be infeasible andare not considered in the model.Number of feasible routes: about 800000.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 23 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (11/11)

Variables in model (1)– (5), (7)– (15): numerous even if theproblem is of small size.

Example. In case of four ASs (a, b, c and d): 24 pickup routes(abcd, acbd, adbc etc.), each of which has a different cost andarrival time at the hub. If two SCs (e and f ) are connected bytruck to one of the ASs a, b, c and d, then the number ofpossible routes: 16×24= 384 (for each AS sequence, each ofthe two SCs e and f can be connected independently by land toa, b, c or d). For each delivery route making its last stop at anAS d, one must consider the route making its last stop at adifferent SC g ∈S \ {d}. Some of the routes can be infeasible andare not considered in the model.Number of feasible routes: about 800000.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 23 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (11/11)

Variables in model (1)– (5), (7)– (15): numerous even if theproblem is of small size.

Example. In case of four ASs (a, b, c and d): 24 pickup routes(abcd, acbd, adbc etc.), each of which has a different cost andarrival time at the hub. If two SCs (e and f ) are connected bytruck to one of the ASs a, b, c and d, then the number ofpossible routes: 16×24= 384 (for each AS sequence, each ofthe two SCs e and f can be connected independently by land toa, b, c or d). For each delivery route making its last stop at anAS d, one must consider the route making its last stop at adifferent SC g ∈S \ {d}. Some of the routes can be infeasible andare not considered in the model.Number of feasible routes: about 800000.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 23 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (11/11)

Variables in model (1)– (5), (7)– (15): numerous even if theproblem is of small size.

Example. In case of four ASs (a, b, c and d): 24 pickup routes(abcd, acbd, adbc etc.), each of which has a different cost andarrival time at the hub. If two SCs (e and f ) are connected bytruck to one of the ASs a, b, c and d, then the number ofpossible routes: 16×24= 384 (for each AS sequence, each ofthe two SCs e and f can be connected independently by land toa, b, c or d). For each delivery route making its last stop at anAS d, one must consider the route making its last stop at adifferent SC g ∈S \ {d}. Some of the routes can be infeasible andare not considered in the model.Number of feasible routes: about 800000.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 23 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (11/11)

Variables in model (1)– (5), (7)– (15): numerous even if theproblem is of small size.

Example. In case of four ASs (a, b, c and d): 24 pickup routes(abcd, acbd, adbc etc.), each of which has a different cost andarrival time at the hub. If two SCs (e and f ) are connected bytruck to one of the ASs a, b, c and d, then the number ofpossible routes: 16×24= 384 (for each AS sequence, each ofthe two SCs e and f can be connected independently by land toa, b, c or d). For each delivery route making its last stop at anAS d, one must consider the route making its last stop at adifferent SC g ∈S \ {d}. Some of the routes can be infeasible andare not considered in the model.Number of feasible routes: about 800000.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 23 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Second stage (11/11)

Variables in model (1)– (5), (7)– (15): numerous even if theproblem is of small size.

Example. In case of four ASs (a, b, c and d): 24 pickup routes(abcd, acbd, adbc etc.), each of which has a different cost andarrival time at the hub. If two SCs (e and f ) are connected bytruck to one of the ASs a, b, c and d, then the number ofpossible routes: 16×24= 384 (for each AS sequence, each ofthe two SCs e and f can be connected independently by land toa, b, c or d). For each delivery route making its last stop at anAS d, one must consider the route making its last stop at adifferent SC g ∈S \ {d}. Some of the routes can be infeasible andare not considered in the model.Number of feasible routes: about 800000.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 23 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (1/2)

- Classical branch-and-bound;- at each branching node a continuous relaxation is solved:

> large number of decision variables;> number of constraints is much less than the number of

decision variables: only a few decision variables take anonzero value in the optimal basic solution.

- Modification of the method:> at each iteration, a reduced LP problem is solved (just

45000 ‘good’ decision variables, chosen heuristically);> determines some or all of the decision variables with

negative reduced costs, introducing the correspondingcolumns in the reduced problem.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 24 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (2/2)

Additional devices used to shorten the execution of thealgorithm.

Example. In the preliminary stages only routes with anutilization factor between 30% and 185% are considered.Two observations:

- because of the reduced number of company aircraft, it isunlikely that an optimal solution will contain a route with aused capacity less than 30%;

- the cost structure of the air transport makes it unlikely thatalong a route more than 85% of the traffic is transported bycommercial airlines.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 25 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (2/2)

Additional devices used to shorten the execution of thealgorithm.

Example. In the preliminary stages only routes with anutilization factor between 30% and 185% are considered.Two observations:

- because of the reduced number of company aircraft, it isunlikely that an optimal solution will contain a route with aused capacity less than 30%;

- the cost structure of the air transport makes it unlikely thatalong a route more than 85% of the traffic is transported bycommercial airlines.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 25 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (2/2)

Additional devices used to shorten the execution of thealgorithm.

Example. In the preliminary stages only routes with anutilization factor between 30% and 185% are considered.Two observations:

- because of the reduced number of company aircraft, it isunlikely that an optimal solution will contain a route with aused capacity less than 30%;

- the cost structure of the air transport makes it unlikely thatalong a route more than 85% of the traffic is transported bycommercial airlines.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 25 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (2/2)

Additional devices used to shorten the execution of thealgorithm.

Example. In the preliminary stages only routes with anutilization factor between 30% and 185% are considered.Two observations:

- because of the reduced number of company aircraft, it isunlikely that an optimal solution will contain a route with aused capacity less than 30%;

- the cost structure of the air transport makes it unlikely thatalong a route more than 85% of the traffic is transported bycommercial airlines.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 25 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Algorithm (2/2)

Additional devices used to shorten the execution of thealgorithm.

Example. In the preliminary stages only routes with anutilization factor between 30% and 185% are considered.Two observations:

- because of the reduced number of company aircraft, it isunlikely that an optimal solution will contain a route with aused capacity less than 30%;

- the cost structure of the air transport makes it unlikely thatalong a route more than 85% of the traffic is transported bycommercial airlines.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 25 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Results

- Method used to generate the optimal service network usingthe current dedicated air fleet:

> cost reduction obtained: more than 7%, correspondingto a yearly saving of several million dollars.

- Method used to define the optimal composition of thecompany’s owned fleet:

> in formulation (1)–(5), (7)–(15), it was assumed that nk

was infinite for each k ∈K ;> solution: use of five aircraft of type 1, three of type 2

and five of type 3;> 35% saving (about $ 10 million) with respect to the

current solution.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 26 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Results

- Method used to generate the optimal service network usingthe current dedicated air fleet:

> cost reduction obtained: more than 7%, correspondingto a yearly saving of several million dollars.

- Method used to define the optimal composition of thecompany’s owned fleet:

> in formulation (1)–(5), (7)–(15), it was assumed that nk

was infinite for each k ∈K ;> solution: use of five aircraft of type 1, three of type 2

and five of type 3;> 35% saving (about $ 10 million) with respect to the

current solution.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 26 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Results

- Method used to generate the optimal service network usingthe current dedicated air fleet:

> cost reduction obtained: more than 7%, correspondingto a yearly saving of several million dollars.

- Method used to define the optimal composition of thecompany’s owned fleet:

> in formulation (1)–(5), (7)–(15), it was assumed that nk

was infinite for each k ∈K ;> solution: use of five aircraft of type 1, three of type 2

and five of type 3;> 35% saving (about $ 10 million) with respect to the

current solution.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 26 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Results

- Method used to generate the optimal service network usingthe current dedicated air fleet:

> cost reduction obtained: more than 7%, correspondingto a yearly saving of several million dollars.

- Method used to define the optimal composition of thecompany’s owned fleet:

> in formulation (1)–(5), (7)–(15), it was assumed that nk

was infinite for each k ∈K ;> solution: use of five aircraft of type 1, three of type 2

and five of type 3;> 35% saving (about $ 10 million) with respect to the

current solution.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 26 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Results

- Method used to generate the optimal service network usingthe current dedicated air fleet:

> cost reduction obtained: more than 7%, correspondingto a yearly saving of several million dollars.

- Method used to define the optimal composition of thecompany’s owned fleet:

> in formulation (1)–(5), (7)–(15), it was assumed that nk

was infinite for each k ∈K ;> solution: use of five aircraft of type 1, three of type 2

and five of type 3;> 35% saving (about $ 10 million) with respect to the

current solution.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 26 / 26

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6 Managing freight transport Case study: Air network design at Intexpress

Results

- Method used to generate the optimal service network usingthe current dedicated air fleet:

> cost reduction obtained: more than 7%, correspondingto a yearly saving of several million dollars.

- Method used to define the optimal composition of thecompany’s owned fleet:

> in formulation (1)–(5), (7)–(15), it was assumed that nk

was infinite for each k ∈K ;> solution: use of five aircraft of type 1, three of type 2

and five of type 3;> 35% saving (about $ 10 million) with respect to the

current solution.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 26 / 26