More-for-less algorithm for fixed-charge transportation problems

• Published in: Omega (Oxford) 2007-02, Vol.35 (1), p.116-127
• Main Authors: Adlakha, Veena, Kowalski, Krzysztof, Vemuganti, R.R., Lev, Benjamin
• Format: Article
• Language: English
• Subjects: Algorithms; Analysis; Applied sciences; Exact sciences and technology; Fixed-charge; Heuristic; Heuristics; Heuristics Transportation problem Fixed-charge More-for-less paradox; Methods; More-for-less paradox; Operational research. Management science; Shipping; Studies; Transportation; Transportation problem; Transportation problem (Operations research)
• ISSN: 0305-0483; 1873-5274
• DOI: 10.1016/j.omega.2006.03.001

The more-for-less (MFL) phenomenon in distribution problems occurs when it is possible to ship more total goods for less (or equal) total cost, while shipping the same quantity or more from each origin and to each destination. This paradox occurs often in fixed-charge transportation problems (FCTPs), and further analysis could bring significant reduction in costs. The MFL phenomenon for FCTPs has received minimal attention in the literature despite the fact that existing analytical algorithms, such as branch and bound, are limited to small problems due to excessive computational effort. In this paper, we develop a simple heuristic algorithm to identify the demand destinations and the supply points to ship MFL in FCTPs. The proposed method builds upon any existing basic feasible solution. It is easy to implement and can serve as an effective tool for managers for solving the more-for-less paradox for large distribution problems.