Case Study: Multiple Objective Analysis of Intermodal Freight Transportation Routes for REI’s Inbound Logistics

Abstract

Nowadays, many logistics managers confront tradeoffs among keeping costs low, delivering goods on time and reducing carbon footprint. In shipping finished goods from a manufacturing plant in Asia to a distribution center in the eastern United States, how should a logistics manager define and choose his preferred route and modes of transportation, taking into account the potentially conflicting priorities? This study explored a case of REI, an outdoor apparel brand/retailer, facing such a decision-making question regarding its inbound logistics from the Port of Shanghai to its distribution center in Bedford, Pennsylvania and approached it as a multiple objective problem. 15 possible intermodal freight transportation routes with different attributes in terms of shipping costs, transit time and greenhouse gas emissions were identified and associated data were collected. The preferred route was derived by employing a simple additive model of preferences, using a pricing out method to assess tradeoff weights and computing the overall utility of each alternative. This framework quantified and visualized how the logistics manager’s choice is affected by his preferences and the tradeoffs he is willing to make, thereby demonstrating its potential as a practical aid for decision-making at the intersection of business and the environment. Accuracy of the model used in this study could be improved by addressing uncertain data and omitted scope. Furthermore, a versatile platform loaded and maintained with accurate and consistent data on shipping costs, transit time and GHG emissions, covering multipoint-to-multipoint intermodal freight transportation routes, could benefit shippers widely by enabling informed decision-making to enhance their business and environmental performance.