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Strategic decisions in truck routing for a retail chain : an analysis of deliveries, return logistics, and backhauls

Bolhaar, J.C. (2014) Strategic decisions in truck routing for a retail chain : an analysis of deliveries, return logistics, and backhauls.

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Abstract:In this report we try to minimize transportation costs for PLUS. At the moment four transport flows are the main logistic cost drivers for PLUS: 1. DC to a store (normal deliveries) 2. Store to a DC (returns: such as containers, beer crates, bottles etc.) 3. Supplier to a DC (including cross-dock, backhaul, and normal deliveries) 4. DC to DC (incidentally, low volumes) In this research we define three scenarios which change the handling of the 2nd and 3th flow: Scenario 1: In Scenario 1 a truck delivers goods to the store on the traditional way. After store delivery PLUS tries to fit in backhauls within the delivery trucks. The pallets from the supplier are together in the truck with return goods form the stores such as containers and crates. If a backhaul is available, fits in the available truck capacity, and contributes a profit, the backhaul is accepted. Scenario 2: In Scenario 2 the retrieval of return goods is separated from the deliveries to the store. This way PLUS makes separate trips just for the collection of returns. The second type of routes is the normal deliveries. After the delivery a truck can perform a backhaul at a nearby supplier. Another option is to negotiate with the logistic service provider (LSP) on lower prices for an empty return route. The LSP could for example use the truck for own purposes after delivery, with both LSP and PLUS sharing the benefits. Scenario 3: PLUS could also retrieve the return goods after the regular delivery at stores. This has an advantage over Scenario 2, since trucks are already present in the regions. For example: A truck first delivers 2 stores and then collects the returns at 3 other stores. The trucks that deliver those 3 stores are empty after delivery. These empty trucks perform a backhaul or may be charged a lower price from the LSP (as in Scenario 2). Since the transport and routing strategy is a long term choice at PLUS, we analyse the routing on the following aspects: Inter-DC deliveries, location and number of DCs, number of return containers and crates, choice for goods to transport, choice for truck capacity, and choice for the number of delivery moments.
Item Type:Essay (Master)
PLUS Retail, the Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
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