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Dynamic Speed Optimization in Supply Chains with Stochastic Demand
Lund University. (Supply Chain Studies)
University of Navarra, Spain.
2016 (English)In: Transportation Science, ISSN 0041-1655, E-ISSN 1526-5447, Vol. 50, no 3, 1114-1127 p.Article in journal (Refereed) Published
Abstract [en]

In this paper, we analyze how to continuously adjust the speed in a supply chain with stochastic demand. For each unit (e.g., truckload, shipping container) in the chain, one must decide at which speed it should be moved downstream, given the state of the system, to minimize total supply chain costs. We decompose the problem into a set of one-dimensional subproblems that can be easily solved and characterize the optimal variable speed policy: under some assumptions, we show that it is optimal to set a speed that is first increasing in the distance to the market, and then decreasing. As a result, at optimality a given unit will experience an accelerating speed and then it will be slowed down, unless a demand occurs, in which case, the speed will be adjusted upward. We finally provide a transportation case study where we estimate the benefits of a variable-speed compared to a fixed-speed policy and show them to be significant both financially and from a CO2-emissions perspective.

Place, publisher, year, edition, pages
Institute for Operations Research and the Management Sciences (INFORMS), 2016. Vol. 50, no 3, 1114-1127 p.
Keyword [en]
variable speed, expediting, environmental impact
National Category
Business Administration
Research subject
Economy, Logistics
Identifiers
URN: urn:nbn:se:lnu:diva-40550DOI: 10.1287/trsc.2014.0561OAI: oai:DiVA.org:lnu-40550DiVA: diva2:791667
Available from: 2015-03-02 Created: 2015-03-02 Last updated: 2016-09-26Bibliographically approved

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CiteExportLink to record
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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf