Profit-Based Network Design in Express Courier Services

The success of express courier services often depends on both how to assign service centers to consolidation terminals and how to extend their cutoff time (deadline) for direct home deliveries coordinated by service centers near customers. This study suggests an approach to design express courier service networks with respect to assignment of service centers to consolidation terminals and extension of their cutoff times. We propose an integer programming model and a genetic algorithm based solution procedure that allows express couriers to maximize their incremental profit. To demonstrate the practicality and efficiency of the proposed model and its solution procedure, we performed an example problem with reduced data sets from an express courier in Korea.