Characterizing the Tradeoffs and Costs Associated with Transportation Congestion in Supply Chains

The ability for retailers to offer attractive prices to consumers relies on the efficient operation of large-scale supply chains that convert natural resources, raw materials, and components into a finished product. Transportation is key to the efficient operation of these supply chains, which comprise raw material sites, manufacturing and assembly facilities, distribution centers and warehouses, and retail stores-often at disparate locations. Past research has not addressed the impact that traffic congestion can have on supply chain design and performance. But researchers at the University of Florida Department of Industrial and Systems Engineering are filling this void by developing models that integrate the effect traffic congestion can have on production economies of scale and how that congestion can influence supply chain design and performance.