Assessing the cost impact of multiple transportation modes to enhance sustainability in an integrated, two stage, automotive supply chain

Abstract

As the automotive industry has been striving to enhance its efficiency, competitiveness, and sustainability, great focus is often placed on opportunities for improving its supply chain operations. We study the effect of introducing multiple modes of transportation in an industry-motivated production and transportation problem involving short-term automotive supply chain planning. We consider multiple, heterogeneous modes of transportation that offer a cost vs. delivery time option to the manufacturer. Having multiple modes of transportation in the system promotes supply chain sustainability. We present an integer linear programming model that captures the availability of multiple transportation modes. We then provide a solution approach based on a hybrid simulated annealing algorithm that we use to analyze the problem. Experimental results demonstrate the impact of additional transportation mode lead times compared to costs in the integrated supply chain.