Direct shipping logistic planning for a hub‐and‐spoke network with given discrete intershipment times

Abstract

Abstract This paper proposes a heuristic procedure to solve the problem of scheduling and routing shipments in a hybrid hub‐and‐spoke network, when a given set of feasible discrete intershipment times is given. The heuristic procedure may be used to assist in the cooperative operational planning of a physical goods network between shippers and logistics service provider, or to assist shippers in making logistics outsourcing decisions. The objective is to minimise the transportation and inventory holding costs. It is shown through a set of problem instances that this heuristic procedure provides better solutions than existing economic order quantity‐based approaches. Computational results are presented and discussed.