Supply Chain Network Optimization Model for Third Party Logistics

Abstract

Supply chain management (SCM) includes the management of the movement and storage of goods and services from their point of origin to the point of consumption. A Supply Chain Network (SCN) is an evolution of the basic supply chain therefore affects an organization’s performance and profit. Since it plays a vital role in survival of a company it should be designed with more attention to assure good performance and profit. Third party logistics (3PL) describes businesses that provide one or many of a variety of logisticsrelated services. Types of services would include public warehousing, contract warehousing, transportation management, distribution management, freight consolidation etc. This thesis focuses on the development of a mathematical model using integer linear programming (ILP) for the purpose of optimizing the multi echelon supply chain network for multi products to minimize the transportation and damage costs hence increasing the profit for the third party logistics company.