Introduction to Logistics Systems Management

Gianpaolo Ghiani, Professor of Operations Research, University of Salento, Lecce, Italy. Gilbert Laporte, Professor Emeritus, Department of Decision Sciences, HEC, Montréal, Canada and University of Bath, United Kingdom. Roberto Musmanno, Professor of Operations Research, University of Calabria, Italy.

• Foreword xiiiPreface xvAcknowledgements xviiAbout the Authors xviiiList of Abbreviations xix1 Introducing Logistics 11.1 Definition of Logistics 11.2 Logistics Systems 31.3 Supply Chains 51.3.1 Logistics Versus Supply Chain Management 51.3.2 A Taxonomy of Supply Chains 51.3.3 The Bullwhip Effect 61.4 Logistics Service Providers 81.5 Logistics in Service Organizations 91.5.1 Logistics in Solid Waste Management 91.5.2 Humanitarian Logistics 101.6 Case Studies 111.6.1 Apple 111.6.2 Adidas AG 131.6.3 Galbani 141.6.4 Pfizer 151.6.5 Amazon 181.6.6 FedEx 201.6.7 A.P. Moller-Maersk 211.6.8 Canadian Pacific Railway 231.7 Trends in Logistics 241.7.1 Reverse and Sustainable Logistics 241.7.2 E-commerce Logistics 261.7.3 City Logistics 281.8 Logistics Objectives and KPIs 301.8.1 Capital-related KPIs 301.8.2 Cost-related KPIs 311.8.3 Service Level-related KPIs 321.9 Logistics Management 361.9.1 Logistics Planning 371.9.2 Logistics Organizational Structures 371.9.3 Controlling 411.10 Data Analytics in Logistics 481.10.1 Descriptive Analytics 481.10.2 Predictive Analytics 491.10.3 Prescriptive Analytics 491.11 Segmentation Analysis 691.11.1 Customer Segmentation 691.11.2 Product Segmentation 701.12 Information Systems 731.13 Questions and Problems 752 Forecasting Logistics Data 832.1 Introduction 832.2 Qualitative Methods 842.3 Quantitative Methods 852.3.1 Explanatory Versus Extrapolation Methods 872.3.2 The Forecasting Process 872.4 Exploratory Data Analysis 882.4.1 The Univariate Case 882.4.2 Histograms 892.4.3 Boxplots 902.4.4 Time Series Plots 922.4.5 The Bivariate Case 922.4.6 Scatterplots 932.5 Data Preprocessing 932.5.1 Insertion of Missing Data 932.5.2 Detection of Outliers 952.5.3 Data Aggregation 962.5.4 Removing Calendar Variations 982.5.5 Deflating Monetary Time Series 992.5.6 Adjusting for Population Variations 1012.5.7 Data Normalization 1012.6 Classification of Time Series 1022.7 Explanatory Methods 1052.7.1 Forecasting with Regression 1052.7.2 Multicollinearity 1072.7.3 Categorical Predictors 1072.7.4 Coefficient of Determination 1082.7.5 Polynomial Regression 1092.7.6 Linear–log, Log–linear and Log–log Regression Models 1112.7.7 Underfitting and Overfitting 1112.7.8 Forecasting with Machine Learning 1132.8 Extrapolation Methods 1182.8.1 Notation 1182.8.2 Decomposition Method 1192.8.3 Further Extrapolation Methods: the Constant-trend Case 1272.8.4 Further Extrapolation Methods: the Linear-trend Case 1322.8.5 Further Extrapolation Methods: the Seasonality Case 1372.8.6 Further Extrapolation Methods: the Irregular Time Series Case 1462.8.7 Further Extrapolation Methods: the Intermittent Time Series Case 1482.9 Accuracy Measures 1542.9.1 Calibration of the Parametrized Forecasting Methods 1552.9.2 Selection of the Most Accurate Forecasting Method 1572.10 Forecasting Control 1582.10.1 Tracking Signal 1582.10.2 Control Charts 1592.11 Interval Forecasts 1622.12 Case Study: Sales Forecasting at Shivoham 1632.13 Case Study: Sales Forecasting at Orlea 1642.14 Questions and Problems 1653 Designing the Logistics Network 1773.1 Introduction 1773.2 Classification of Logistics Network Design Problems 1783.3 The Number of Facilities in a Logistics System 1813.4 Qualitative Versus Quantitative Location Methods 1833.5 The Weighted Scoring Method 1833.6 The Analytical Hierarchy Process 1853.7 Single-commodity One-echelon Continuous Location Problems 1903.8 Single-commodity Two-echelon Continuous Location Problems 1973.9 Single-commodity One-echelon Discrete Location Problems 2003.10 Single-commodity Two-echelon Discrete Location Problems 2223.11 The Multi-commodity Case 2263.12 Location-covering Problems 2303.13 p-centre Problems 2343.14 Data Aggregation 2413.15 Location Models Under Uncertainty 2443.15.1 A Stochastic Location–allocation Model 2443.15.2 A Location-routing Model with Uncertain Demand 2473.16 Case Study: Intermodal Container Depot Location at Hardcastle 2513.17 Case Study: Location–Allocation Decisions at the Italian National Transplant Centre 2543.18 Questions and Problems 2564 Selecting the Suppliers 2674.1 Introduction 2674.2 Definition of the Set of Potential Suppliers 2694.3 Definition of the Selection Criteria 2704.4 Supplier Selection 2744.5 Supplier Relationship Management Software 2784.6 Case Study: the System for the Selection of Suppliers at Baxter 2794.7 Case Study: the Supplier Selection at Onokar 2824.8 Questions and Problems 2845 Managing a Warehouse 2905.1 Introduction 2905.1.1 Warehouse Operations 2905.1.2 Warehouse Functional Zones 2925.1.3 Advantages of Warehousing 2945.2 Types of Warehouses 2945.2.1 Classification with Respect to the Position in the Logistics System 2945.2.2 Classification with Respect to Ownership 2965.2.3 Classification with Respect to Climate-control 2975.2.4 Classification with Respect to the Level of Automation 2975.3 Warehousing Costs 2985.4 Unit Loads 3005.4.1 Freight Classification 3005.4.2 Unit Loads and Stock Keeping Units 3015.4.3 Packaging 3015.4.4 Palletized Unit Loads 3025.4.5 Containerized Unit Loads 3055.5 Storage Systems 3075.5.1 Block Stacking 3075.5.2 Pallet Racks 3075.5.3 Shelves 3115.5.4 Cabinet and Carousel Systems 3135.6 Internal Transportation Systems 3145.6.1 Manual Handling and Non-autonomous Vehicles 3155.6.2 Automated Guided Vehicles 3185.6.3 Stacker Cranes 3205.6.4 Conveyors 3215.7 Product Identification Systems 3225.7.1 SKU Codes 3225.7.2 Global Trade Item Numbers 3235.7.3 Barcodes 3235.7.4 QR Codes 3255.7.5 Logistic Labels 3255.7.6 Radio-frequency Identification 3255.8 Warehouse Performance Measures 3275.9 Warehouse Management Systems 3335.10 Warehouse Design 3355.10.1 Internal Transportation Technology Selection 3365.10.2 Layout Design 3375.10.3 Sizing of the Storage Zone 3415.10.4 Sizing of the Receiving and Shipping Zones 3485.10.5 Sizing of an AS/RS 3495.10.6 Sizing a Vehicle-based Internal Transportation System 3545.11 Storage Space Allocation 3555.12 Inventory Management 3605.12.1 Deterministic models 3615.12.2 Stochastic Models 3735.12.3 Selecting an Inventory Policy 3805.12.4 Multiproduct Inventory Models 3825.13 Crossdock Door Assignment Problem 3875.14 Put-away and Order Picking Optimization 3905.14.1 Parts-to-picker Systems 3905.14.2 Picker-to-parts and AGV-based Systems 3905.15 Load Consolidation 3975.15.1 One-dimensional Bin Packing Problems 4005.15.2 Two-dimensional Bin Packing Problems 4035.15.3 Three-dimensional Bin Packing Problems 4065.16 Case Study: Inventory Management at Wolferine 4155.17 Case Study: Airplane Loading at FedEx 4165.18 Questions and problems 4186 Managing Freight Transportation 4316.1 Introduction 4316.2 Transportation Modes 4316.2.1 Road Transportation 4326.2.2 Water Transportation 4346.2.3 Rail Transportation 4376.2.4 Air Transportation 4386.2.5 Pipeline Transportation 4396.2.6 Intermodal Transportation 4396.2.7 Comparison Among Transportation Modes 4406.3 Freight Transportation Terminals 4436.3.1 Port Terminals 4446.3.2 Air Cargo Terminals 4466.3.3 Rail Freight Terminals 4486.3.4 Road Freight Terminals 4496.4 Classification of Freight Transportation Management Problems 4506.4.1 Long-haul Freight Transportation Management 4506.4.2 Freight Transportation Terminal Management 4516.4.3 Short-haul Freight Transportation Management 4526.5 Transportation Management Systems 4546.6 Freight Traffic Assignment Problems 4556.6.1 Minimum-cost Flow Formulation 4566.6.2 Linear Single-commodity Minimum-cost Flow Problems 4586.6.3 Linear Multi-commodity Minimum-cost Flow Problems 4656.7 Service Network Design Problems 4716.8 Vehicle Allocation Problems 4786.9 A Dynamic Driver Assignment Problem 4816.10 Vehicle Fleet Composition 4836.11 Shipment Consolidation 4856.12 Vehicle Routing Problems 4886.12.1 The Travelling Salesman Problem 4916.12.2 The Node Routing Problem with Operational Constraints 5066.12.3 The Node Routing and Scheduling Problem with Time Windows 5196.12.4 Arc Routing Problems 5306.12.5 Route Sequencing 5406.13 Real-time Vehicle Routing Problems 5416.14 Integrated Location and Routing Problems 5436.15 Inventory Routing Problems 5456.16 Case Study: Air Network Design at Intexpress 5556.17 Case Study: Dynamic Vehicle-dispatching Problem with Pickups and Deliveries at eCourier 5596.18 Questions and Problems 561Index 572