Decision onRegional Logistics Network Based on H-S and P-P Network: Taking Tobacco Transportation Logistics as anExample

Abstract

Objectives: The logistics hub construction has always been the short board of logistics network planning in China. In order to improve the decision-making efficiency of logistics enterprise’s hub selection and reduce its comprehensive operation cost, this paper establishes a cost difference model for hub-and-spoke(H-S) and point-to-point(P-P) networks considering the fixed cost of hubs, transportation and route costs based on the 0-1 integer nonlinear programming. The model aims at minimizing the cost difference between the two networks, and divides the fixed cost of the hubs into three situations: full lease, lease and self-built, and fully self-built. Finally, this paper takes tobacco transportation logistics as an example, and use particle swarm algorithm to solve the model by using tobacco transportation logistics data of a logistics enterprise in Jiangsu Province. The results show that: (i) in the case of complete leasing, the total cost of the H-S network decreases with the increase of the number of hubs, and the cost change has a point of intersection with the total cost of the P-P network;(ii) when the lease and self-build are mixed, the increase is first reduced and then increased, it is U-shaped and has a minimum value, and there are two intersections with the total cost of the P-P network;(iii) the situation of completely self-built and fully leased is just the opposite. This paper takes tobacco transportation logistics as a representative, and provides a reference for logistics companies to choose the appropriate regional logistics network structure and different pivot points.