Abstract
Logistics has been acknowledged increasingly as a key issue of supply chain management to improve business efficiency under global competition and diversified customer demands. This study aims at improving a quality of strategic decision making associated with dynamic natures in logistics network optimization. Especially, noticing an importance to concern with a multimodal logistics under multiterms, we have extended a previous approach termed hybrid tabu search (HybTS). The attempt intends to deploy a strategic planning more concretely so that the strategic plan can link to an operational decision making. The idea refers to a smart extension of the HybTS to solve a dynamic mixed integer programming problem. It is a two-level iterative method composed of a sophisticated tabu search for the location problem at the upper level and a graph algorithm for the route selection at the lower level. To keep efficiency while coping with the resulting extremely large-scale problem, we invented a systematic procedure to transform the original linear program at the lower-level into a minimum cost flow problem solvable by the graph algorithm. Through numerical experiments, we verified the proposed method outperformed the commercial software. The results indicate the proposed approach can make the conventional strategic decision much more practical and is promising for real world applications.
