Another real-world mathematical problem, common to many industries, is the distribution of material and products from plants to customers. For a network of origins and destinations, there are many shipping alternatives, including choices of transportation mode (e.g., road, rail, air) and geographical routes. Some key decisions are routing options over the network, and shipping frequencies on network links. As shown in Figure 2, routing options involve shipping direct, via a terminal or distribution center, and by a combination of routes. These options affect distances traveled and times in transit, which in turn affect transportation and inventory costs. Shipping frequency decisions also affect these costs. Transportation costs favor large infrequent shipments, while inventory costs favor small frequent shipments. Trade-offs between these costs are complex for large networks, and finding the optimal solution is a challenging mathematical problem. In addition to decisions for operations of a given network, there are major strategic decisions, such as the selection and location of distribution centers.
Another real-world mathematical problem, common to many industries, is the distribution of material and products from plants to customers. For a network of origins and destinations, there are many shipping alternatives, including choices of transportation mode (e.g., road, rail, air) and geographical routes. Some key decisions are routing options over the network, and shipping frequencies on network links. As shown in Figure 2, routing options involve shipping direct, via a terminal or distribution center, and by a combination of routes. These options affect distances traveled and times in transit, which in turn affect transportation and inventory costs. Shipping frequency decisions also affect these costs. Transportation costs favor large infrequent shipments, while inventory costs favor small frequent shipments. Trade-offs between these costs are complex for large networks, and finding the optimal solution is a challenging mathematical problem. In addition to decisions for operations of a given network, there are major strategic decisions, such as the selection and location of distribution centers.
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