Intermodal Logistic System Network Design with Expedited Transportation Services

2016PDFTech ReportNCITEC Project No. 2013-22Biomass fuelsDemandFreight transportationIntermodal transportationLogisticsMathematical modelsSuppliersSupply chain managementRelaxation (Mechanics)Freight TransportationPlanning and ForecastingNetwork designUnited StatesFloridaMississippi State University. National Center for Intermodal Transportation for Economic CompetitivenessLi, XiaopengUniversity of South Florida. Dept. of Civil and Environmental EngineeringUS Transportation CollectionA comprehensive network design planning framework is critical to the capacity, efficiency and reliability of a global supply chain system. Most studies on logistics network planning are based on simple and deterministic assumptions of day-to-day supply chain operations. However, the performance of a network logistic system is in fact largely affected by uncertainties in demand rate and transportation lead times. This study proposes a mathematical model for the design of a two-echelon supply chain where a set of suppliers serve a set of terminal facilities that receive uncertain customer demands. This model integrates a number of system decisions in both the planning and operational stages, including facility location, multilevel service assignments, multi-modal transportation configuration, and inventory management, to minimize the expected system cost under uncertainties from both suppliers and demands. We also consider probabilistic supplier disruptions that may halt product supply from certain suppliers from time to time. We developed a customized solution approach based on Lagrangian relaxation that can solve these models efficiently and accurately. Numerical examples are conducted to test the proposed model and draw managerial insights into how the key parameters affect the optimal system design. Finally, a user friendly web-based interface is developed for biofuel supply chain network design with graphic interactions.75