CIE42 Proceedings, 16-18 July 2012, Cape Town, South Africa © 2012 CIE & SAIIE
147-1
A ROBUST MATHEMATICAL MODEL
FOR ROUTE PLANNING OF A THIRD-PARTY LOGISTICS PROVIDER
J. Jouzdani
1*
and M. Fathian
1
1
School of Industrial Engineering,
Iran University of Science and Technology, Tehran, Iran.
javidjouzdani@iust.ac.ir
fathian@iust.ac.ir
ABSTRACT
Third-party logistics (3PL) is gaining ground as companies try to focus on their core
competencies and outsource their logistics activities. However, the environment is becoming
more and more competitive for 3PL providers as new rivals enter the market. Routing, as
one of the main activities of 3PL, has a major share in transportation costs and apparently
should be planned cautiously. In addition, route planning in real-world situations is subject
to uncertainties which may greatly affect the performance of a 3PL provider if neglected.
Having these concepts in mind, a robust mathematical model for route planning problem in a
3PL company is proposed. The problem is modeled as a robust multi-depot multiple
travelling salesman problem (MmTSP) and numerical results are provided and a series of
sensitivity analyses are conducted to show that the proposed model is promising.
Keywords: Robust Optimization, Route Planning, Third-party Logistics Provider, Uncertainty
*
Corresponding Author