An analysis of international transportation network

Abstract

This thesis discusses a network design problem based on a case study with a footwear company, which intends to minimize total supply chain costs by establishing a distribution network which bypasses its primary distribution center (DC). Through the new network, called the DC bypass network, the company ships products directly from its Asian factories to a logistics hub at an entry port in the US and then on to customers, a particular group of chosen customers. We assess the project by comparing costs derived from a baseline and optimization model. A baseline model represents the company's existing logistics network while optimization models capture future supply chains with different scenarios. The models convert a real supply chain network into the relationships between nodes and links. Nodes indicate facilities while links refer to the flow of the product. In brief, this case study is about how a company evaluates its transportation network. Methods to determine a specific location or multiple locations for the DC bypass operations are discussed. Furthermore, the robustness of an optimal solution will be measured through a sensitivity analysis. Other benefits include the reduction of lead time is discussed in the further research.