A strategic alliance model with a regional monopoly of service centres in express courier services

Abstract

Since the 1990s, the demand for the direct shipment of purchased goods by express couriers has increased as the result of an explosive growth in the e-tailing, telemarketing and TV home-shopping industries, which has caused the emergence of an excessive number of express courier companies over the last several years. This increasing number of companies leads to severe competition among small- and medium-sized companies and a greater number of facilities and delivery vehicles for faster service, which may result in the waste of national resources. Furthermore, it is often the case that the facilities and delivery vehicles owned by individual companies are operated with a low utilisation rate. It has been suggested that cooperative strategic alliances in the operation of facilities and delivery vehicles may be beneficial especially for small- and medium-sized companies to overcome financial problems and improve declining profitability by reducing or eliminating overlapping investments. This study proposes a network design model for strategic alliances that share service centres. An integer programming model and its solution procedure based on maxmin and maxsum criteria are also developed respectively. The applicability and efficiency of the proposed model are demonstrated through an illustrative numerical example. Copyright © 2009, Inderscience Publishers.