A Mathematical Model to Improve the Performance of Logistics Network

Abstract

The role of logistics nowadays is expanding from just providing transportation and warehousing to offering total integrated logistics. To remain competitive in the global market environment, business enterprises need to improve their logistics operations performance. The improvement will be achieved when we can provide a comprehensive analysis and optimize its network performances. In this paper, a mixed integer linier model for optimizing logistics network performance is developed. It provides a single-product multi-period multi-facilities model, as well as the multi-product concept. The problem is modeled in form of a network flow problem with the main objective to minimize total logistics cost. The problem can be solved using commercial linear programming package like CPLEX or LINDO. Even in small case, the solver in Excel may also be used to solve such model.

Keywords: logistics network, integrated model, mathematical programming, network optimization