Abstract
This study is motivated by a project awarded by one of the largest international retail distributors in the world. An important task for the distributor is to plan the distribution of goods from Asia to various destinations across Europe. The goods are transported by shipping companies along shipping lanes, and these companies offer different discount rates depending on the freight quantity. The task involves purchasing freight capacity from shipping companies for each shipping lane based on projected demand, and subject to minimum quantity requirements, such that the total transportation cost is minimized. Existing work on this and related problems employs commercial linear programming software to solve their models. The problem is \(\mathcal{NP}\)-hard, and is therefore unlikely to be solvable optimally in reasonable time for large instances. Hence, we propose a heuristic-based algorithm that combines a filter and fan search scheme with a tabu search mechanism for the problem. Experiments on randomly generated test instances show that our algorithm produces superior solutions in less computation time and requires less computer memory compared to ILOG CPLEX 11.0.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Burke, G.J., Carrillo, J., Vakharia, A.J.: Heuristics for sourcing from multiple suppliers with alternative quantity discounts. European Journal of Operational Research 186(1), 317–329 (2008)
Chauhan, S.S., Eremeev, A.V., Romanova, A.A., Servakh, V.V.: Approximation of the supply scheduling problem. Operations Research Letters 33(3), 249–254 (2005)
Chung, C.S., Hum, S.H., Kirca, O.: An optimal procedure for the coordinated replenishment dynamic lot-sizing problem with quantity discounts. Naval Research Logistics 47(8), 686–695 (2000)
Glover, F., Laguna, M.: Tabu search. Kluwer Academic Publishers, Dordrecht (1997)
Goossens, D.R., Maas, A.J.T., Spieksma, F.C.R., van de Klundert, J.J.: Exact algorithms for procurement problems under a total quantity discount structure. European Jounal of Operational Research 178(2), 603–626 (2007)
Lim, A., Wang, F., Xu, Z.: A transportation problem with minimum quantity commitments. Transportation Science 40(1), 117–129 (2006)
Mirmohammadi, S.H., Shadrokh, S., Kianfar, F.: An efficient optimal algorithm for the quantity discount problem in material requirement planning. Computers and Operations Research 36(6), 1780–1788 (2009)
Munson, G.L., Rosenblatt, M.J.: Theories and realities of quantity discounts: An explanatory study. Production and Operations Management 7(4), 352–369 (1998)
Rubin, P.A., Benton, W.C.: Evaluating jointly constrained order quantity complexities for incremental discounts. European Journal of Operational Research 149(3), 557–570 (2003)
Sadrian, A.A., Yoon, Y.S.: A procurement decision support system in business volume discount environments. Operations Research 42(1), 14–23 (1994)
Stadtler, H.: A general quantity discount and supplier selection mixed integer programming model. OR Spectrum 29(4), 723–744 (2007)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2011 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Gao, X., Lim, A., Oon, WC., Qin, H. (2011). An Algorithm for the Freight Allocation Problem with All-Units Quantity-Based Discount. In: Mehrotra, K.G., Mohan, C.K., Oh, J.C., Varshney, P.K., Ali, M. (eds) Modern Approaches in Applied Intelligence. IEA/AIE 2011. Lecture Notes in Computer Science(), vol 6704. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-21827-9_26
Download citation
DOI: https://doi.org/10.1007/978-3-642-21827-9_26
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-21826-2
Online ISBN: 978-3-642-21827-9
eBook Packages: Computer ScienceComputer Science (R0)