Optimising the selection of transport services : A proof-of-concept application utilising time-expansion and Integer Programming

Abstract: Companies who wish to ship physical products from one place to another are faced with the choice of a transportation solution among several alternative suppliers each with multiple pricing, route and time options. An optimal solution would allow companies to save resources as well as more effectively serve its customer deliveries. In this project we have approached this problem as an instance of the well researched Minimum Cost Flow Problem and have created a proof-of-concept application utilising time expansion and a Integer Programming solver. The resulting application can for a batch of single commodity demands, including a maximal allowed transport time, successfully find an optimal cost solution. Where the solver is taking account of potential cost savings of consolidated transportation as well as cost and time of handling in transshipment points.