UPS Optimizes Its Air Network

Operations research specialists at UPS and the Massachusetts Institute of Technology (MIT) created a system to optimize the design of service networks for delivering express packages. The system simultaneously determines aircraft routes, fleet assignments, and package routings to ensure overnight delivery at minimal cost. It has become central to the UPS planning process, fundamentally transforming the process and the underlying planning assumptions. Planners now use the system’s solutions and insights to improve plans. UPS management credits the system with identifying operational changes that have saved over $87 million between 2000 and 2002. Anticipated future savings are expected to be in the hundreds of millions of dollars.