Characterizing the tradeoffs and costs associated with transportation congestion in supply chains.
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2010-01-21
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Alternative Title:Final report to the Center for Multimodal Solutions for Congestion Mitigation (CMS)
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Abstract:We consider distribution and location-planning models for supply chains that explicitly ; account for traffic congestion effects. The majority of facility location and transportation ; planning models in the operations research literature consider facility operations and ; transportation costs as separable (e.g., linear) by origin-destination pairs. Our goal is to ; understand how congestion costs and effects, which are not separable, influence supply chain ; location and distribution decisions. We study a competitive facility location and market-supply ; game with multiple firms competing in multiple markets in a congested distribution network. As ; a result of location and quantity decisions, firms are subject to location-specific transportation ; costs, convex traffic congestion costs and fixed facility location costs. The unit price in each ; market is a linear decreasing function of the total amount shipped to the market by all firms; that ; is, we consider an oligopolistic Cournot game and analyze the two-stage Nash Equilibrium. We ; discuss the results of extensive numerical studies that illustrate the effects of traffic congestion ; on a firm's equilibrium location and quantity decisions and demonstrate the efficiency of our ; solution approaches for finding equilibrium solutions.
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Main Document Checksum:urn:sha256:1ba56077a26036da0832b9b38390f01a57f2e47b7bebd5362248585ff081d69b