Optimal Shipment Decisions for an Airfreight Forwarder: Formulation and Solution Methods

Transportation Research Part C 21 (2012) 17–30

30 Pages Posted: 13 Jun 2016 Last revised: 29 Jun 2016

See all articles by Zichao Li

Zichao Li

University of Waterloo - Department of Management Sciences

James H. Bookbinder

University of Waterloo

Samir Elhedhli

University of Waterloo - Department of Management Sciences

Date Written: June 16, 2016

Abstract

We study the freight forwarder’s shipment planning problem in an airfreight forwarding network where a set of cargo shipments have to be transported to given destinations. We provide mixed integer programming formulations that use piecewise-linear cargo rates and account for volume and weight constraints, flight departure/arrival times, as well as shipment-ready times.

After exploring the solution of such models using CPLEX, we devise two solution methodologies to handle large problem sizes. The first is based on Lagrangian relaxation, where the problems decompose into a set of knapsack problems and a set of network flow problems. The second is a local branching heuristic that combines branching ideas and local search. The two approaches show promising results in providing good quality heuristic solutions within reasonable computational times, for difficult and large shipment consolidation problems.

Keywords: Air cargo; Langrangian relaxation; Network planning; Local branching; Column generation; Heuristics

Suggested Citation

Li, Zichao and Bookbinder, James H. and Elhedhli, Samir, Optimal Shipment Decisions for an Airfreight Forwarder: Formulation and Solution Methods (June 16, 2016). Transportation Research Part C 21 (2012) 17–30, Available at SSRN: https://ssrn.com/abstract=2771329

Zichao Li

University of Waterloo - Department of Management Sciences ( email )

Waterloo, Ontario N2L 3G1
Canada

James H. Bookbinder (Contact Author)

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1
Canada

Samir Elhedhli

University of Waterloo - Department of Management Sciences ( email )

Waterloo, Ontario N2L 3G1
Canada

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