A supply-chain optimization model of the allocation of containerized imports from Asia to the United States

This article proposes a mixed integer non-linear programming model for the optimizing supply chains of importers of waterborne containerized goods from Asia to the USA. This model determines the least-cost strategy for an importer, in terms of ports and landside transportation modes to be used, where costs considered include costs for transportation and handling, pipeline inventory, and safety-stock. We introduce a heuristic algorithm to quickly solve the mathematical model to near optimality. We assess the proposed heuristic compared to use of a commercial solver, and provide general recommendations for efficient supply-chain strategies as a function of the value of imported goods.

Research highlights
► Allocation of containerized imports to ports and landside transportation modes.
► Determines safety-stock inventories as a function of lead time mean and variation.
► Minimizes total costs to importer for transportation, handling and inventory.
► Heuristic algorithm solves mixed integer non-linear program to near-optimality.
► Best supply-chain strategy as a function of declared value and holding cost rate.