Optimal consolidation of air freight for an international cargo carrier

Official URL: http://risc01.sabanciuniv.edu/record=b1615038 (Table of Contents)

Air cargo carriers consolidate the freight in order to avoid extra handling e ort and holding cost during transfers among the international hubs. We consider planning problems associated with the consolidation process of an international air cargo carrier. At the operational level of planning, the cargo carrier is concerned with optimal consolidation decisions given the locations and capacities of gateways with consolidation capability along with the ight network information. An optimal consolidation maximizes the savings due to transfer and transport of freight in a consolidated manner. We develop a set covering type linear programming problem formulation for this consolidation and routing problem; we also propose a column generation method to solve large-scale instances. At the tactical level, we study the expansion of gateway capacities keeping the gateway network and ight network as it is. The problem formulation is extended to cope with capacity expansion decisions and the solution method is enhanced appropriately. At the strategical level, we consider decisions associated with selecting new locations for gateways. In order to solve this problem, the column generation method is employed as a subroutine in a heuristic algorithm. For our computational experiments, we use real-life data set from a European-based international air cargo carrier.