Mathematical study of trade-off relations in logistics systems

Authors:
Youhei Nanazawa;Hiroshi Suito;Hideo Kawarada
Affiliations:
Graduate School of Environmental Sciences, Okayama University, 3-1-1, Tsushima-naka, Okayama, 700-8530, Japan;Graduate School of Environmental Sciences, Okayama University, 3-1-1, Tsushima-naka, Okayama, 700-8530, Japan;Department of Logistics and Distribution, Ryutsu Keizai University, Hirahata 120, Ryuugasaki, Ibaraki, 301-8555, Japan
Venue:
Journal of Computational and Applied Mathematics
Year:
2009

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Abstract

This paper presents a mathematical model of trade-off relations arising in third party logistics using Pareto optimal solutions for multi-objective optimization problems. The model defines an optimal set of distribution costs and service levels constituting a trade-off relation. An analogy to the concept of the indifference curve in the field of economics is discussed. Numerical experiments for a simplified problem are performed, demonstrating an increasing process of the utility of logistics.