Abstract
This paper studies an automotive distribution network with two transportation modes: railway and highway. Because lead-time influences the turnaround rate of expensive railcars and volume has a large impact on the total lead-time from a plant to a railway ramp, the paper considers quantity discounts in railway cost structures. This paper proposes a business scheme based on an integer linear program (ILP) to minimize the total distribution costs by making mode and ramp selection decisions. The numerical experiments based on randomly created instances show that the solutions obtained from the ILP significantly outperform the results of the simulated manual negotiation process used in practice. The two schemes lead to results that are not statistically different in payments to railways.
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Jin, M., Eksioglu, S.D., Eksioglu, B. et al. Mode Selection for Automotive Distribution with Quantity Discounts. Netw Spat Econ 10, 1–13 (2010). https://doi.org/10.1007/s11067-007-9020-0
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DOI: https://doi.org/10.1007/s11067-007-9020-0