Determining Optimal Container Inventory and Routing

Generalizing work of Samuel and Ullmann, this paper shows how to determine the optimal number and routings of containers used to move mail among several cities. Critical assumptions are (a) periodic demand patterns and linear transportation costs (for full or empty containers, or uncontainerized mail) between each city-pair, and (b) constant fixed cost per container in the system. The optimization problem is transformed into a network flow linear program for which efficient solution methods are known.