Airfreight forwarder’s shipment planning under uncertainty: A two-stage stochastic programming approach

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Airfreight forwarder’s shipment planning under uncertainty: A two-stage stochastic programming approach

Hui, Yer Van / Gao, Jia / Leung, Lawrence / Wallace, Stein

Highlights • This study presents a practical problem in intermodal shipment planning vis transfer ports where processing times are random. • Adopts control tower shipment monitoring with recourses. • We formulate a stochastic programming model with scenario generation in examining the worst cases. • Presents an illustrative example with industry data in South China international logistics. • Discusses managerial insights.

Abstract This paper addresses the shipment planning problem with random processing times in intermodal logistics via transfer ports. Shipment activities are divided into two groups according to regional settings. Activity processing times in region A are assumed to be random while those in region B are deterministic. At the beginning (stage 1), the forwarder assigns agents to all job activities (planning decision). In case a shipment delay is observed, an in-process adjustment (recourse decision) is implemented (stage 2). A two-stage stochastic programming model is established and an illustrative example is discussed. Managerial insights are presented in a simulation study.