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Strategic Service Network Design for DHL Hong Kong

Author

Listed:
  • Waiman Cheung

    (Department of Decision Sciences and Managerial Economics, The Chinese University of Hong Kong Shatin, N.T., Hong Kong)

  • Lawrence C. Leung

    (Department of Decision Sciences and Managerial Economics, The Chinese University of Hong Kong)

  • Y. M. Wong

    (Propack International Holdings Limited Unit 1006, 10/F Technology Plaza 29-35 Sha Tsui Road Tsuen Wan, N.T., Hong Kong)

Abstract

We developed a two-phase network planning methodology to design a service network for DHL(HK) based on two measures of service performance: service coverage and service reliability. The methodology consists of first using an optimization model to determine a least-cost distribution network, which forms the basis of a simulation model for analyzing the network's operational characteristics. It takes into consideration such design issues as inbound and outbound shipment, equivalent shipment, cutoff time, demand fluctuation, and random behaviors. DHL decision makers can now examine trade-offs between coverage and reliability by adjusting workforce, changing cutoff time, or redesigning the service network.

Suggested Citation

  • Waiman Cheung & Lawrence C. Leung & Y. M. Wong, 2001. "Strategic Service Network Design for DHL Hong Kong," Interfaces, INFORMS, vol. 31(4), pages 1-14, August.
    • Handle: RePEc:inm:orinte:v:31:y:2001:i:4:p:1-14
    DOI: 10.1287/inte.31.4.1.9663
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    References listed on IDEAS

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    1. Richard L. Nolan & Michael G. Sovereign, 1972. "A Recursive Optimization and Simulation Approach to Analysis with an Application to Transportation Systems," Management Science, INFORMS, vol. 18(12), pages 676-690, August.
    2. E. William Moore & Janice M. Warmke & Lonny R. Gorban, 1991. "The Indispensable Role of Management Science in Centralizing Freight Operations at Reynolds Metals Company," Interfaces, INFORMS, vol. 21(1), pages 107-129, February.
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    Cited by:

    1. Fragkos, Ioannis & Cordeau, Jean-François & Jans, Raf, 2021. "Decomposition methods for large-scale network expansion problems," Transportation Research Part B: Methodological, Elsevier, vol. 144(C), pages 60-80.
    2. Jianjun Zhang & Ou Tang & Jin Zhao & Jiazhen Huo & Yonggang Xia, 2013. "CPEL Redesigns Its Land Express Network," Interfaces, INFORMS, vol. 43(3), pages 221-231, May-June.

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