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UPS Optimizes Its Air Network

Author

Listed:
  • Andrew P. Armacost

    (Department of Management, US Air Force Academy, 2354 Fairchild Drive, Suite 6J100, Colorado Springs, Colorado 80920)

  • Cynthia Barnhart

    (Department of Civil and Environmental Engineering, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Room 1-229, Cambridge, Massachusetts 02139)

  • Keith A. Ware

    (UPS Operations Research Group, 1400 Hurstbourne Parkway, Louisville, Kentucky 40223)

  • Alysia M. Wilson

    (UPS Operations Research Group, 1400 Hurstbourne Parkway, Louisville, Kentucky 40223)

Abstract

Operations research specialists at UPS and the Massachusetts Institute of Technology (MIT) created a system to optimize the design of service networks for delivering express packages. The system simultaneously determines aircraft routes, fleet assignments, and package routings to ensure overnight delivery at minimal cost. It has become central to the UPS planning process, fundamentally transforming the process and the underlying planning assumptions. Planners now use the system’s solutions and insights to improve plans. UPS management credits the system with identifying operational changes that have saved over $87 million between 2000 and 2002. Anticipated future savings are expected to be in the hundreds of millions of dollars.

Suggested Citation

  • Andrew P. Armacost & Cynthia Barnhart & Keith A. Ware & Alysia M. Wilson, 2004. "UPS Optimizes Its Air Network," Interfaces, INFORMS, vol. 34(1), pages 15-25, February.
    • Handle: RePEc:inm:orinte:v:34:y:2004:i:1:p:15-25
    DOI: 10.1287/inte.1030.0060
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    References listed on IDEAS

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    Cited by:

    1. G. Guastaroba & M. G. Speranza & D. Vigo, 2016. "Intermediate Facilities in Freight Transportation Planning: A Survey," Transportation Science, INFORMS, vol. 50(3), pages 763-789, August.
    2. Meuffels, W.J.M. & Fleuren, H.A. & Cruijssen, F. & van Dam, E.R., 2009. "Enriching the Tactical Network Design of Express Service Carriers with Fleet Scheduling Characteristics," Other publications TiSEM e146d914-9638-4ae0-9587-b, Tilburg University, School of Economics and Management.
    3. Quesada Pérez, José Miguel & Lange, Jean-Charles & Tancrez, Jean-Sébastien, 2018. "A multi-hub Express Shipment Service Network Design model with flexible hub assignment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 120(C), pages 116-131.
    4. Archetti, Claudia & Peirano, Lorenzo & Speranza, M. Grazia, 2022. "Optimization in multimodal freight transportation problems: A Survey," European Journal of Operational Research, Elsevier, vol. 299(1), pages 1-20.
    5. O'Kelly, Morton E., 2014. "Air freight hubs in the FedEx system: Analysis of fuel use," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 1-12.
    6. Meuffels, W.J.M., 2015. "The design of road and air networks for express service providers," Other publications TiSEM d3266cb8-bc55-41be-adc7-4, Tilburg University, School of Economics and Management.
    7. Michael F. Gorman & John-Paul Clarke & Amir Hossein Gharehgozli & Michael Hewitt & René de Koster & Debjit Roy, 2014. "State of the Practice: A Review of the Application of OR/MS in Freight Transportation," Interfaces, INFORMS, vol. 44(6), pages 535-554, December.
    8. Sophie N. Parragh & Karl F. Doerner, 2018. "Solving routing problems with pairwise synchronization constraints," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 26(2), pages 443-464, June.
    9. Teodor Gabriel Crainic & Nicoletta Ricciardi & Giovanni Storchi, 2009. "Models for Evaluating and Planning City Logistics Systems," Transportation Science, INFORMS, vol. 43(4), pages 432-454, November.
    10. Louwerse, I. & Mijnarends, J. & Meuffels, I. & Huisman, D. & Fleuren, H.A., 2012. "Scheduling Movements in the Network of an Express Service Provider," Econometric Institute Research Papers EI 2012-08, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    11. Ahmad Baubaid & Natashia Boland & Martin Savelsbergh, 2021. "The Value of Limited Flexibility in Service Network Designs," Transportation Science, INFORMS, vol. 55(1), pages 52-74, 1-2.
    12. Kilpi, Jani, 2007. "Fleet composition of commercial jet aircraft 1952–2005: Developments in uniformity and scale," Journal of Air Transport Management, Elsevier, vol. 13(2), pages 81-89.
    13. Frederic H. Murphy, 2005. "ASP, The Art and Science of Practice: Elements of a Theory of the Practice of Operations Research: A Framework," Interfaces, INFORMS, vol. 35(2), pages 154-163, April.
    14. 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.
    15. I. Campbell & M. Montaz Ali & M. Silverwood, 2020. "Solving a dial-a-flight problem using composite variables," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 28(1), pages 123-153, April.

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