Considering Allocations in Shipment Building

Planning can consider service provider percentage allocation commitments when making routing selections for orders. Allowing allocation commitments to be considered in container optimization is enabled via the logic configuration parameter CONSIDER COMMITMENT ALLOCATIONS. This parameter is off (false) by default.

This is valid for both order release and order movement planning. Additionally, it pertains to cost-based and network routing planning

Following are some use cases where service providers have limited availability of equipment groups and the choice of equipment plays a crucial role in the carrier selection. Let's assume the following:

• There are two equipment groups:
  • 40FT has a capacity of 40,000 lb and costs $1000.
  • 20FT can take up to 20,000 lb. and costs $700.
• The commitment allocation on this lane for this group is 50:50.
• We have an order bundle with 200,000 lb.
• We'll use weight so volume is not a factor.
• Also assume the objective is Optimize Cost.

Note: When considering allocation groups on orders and matching them with the correct allocation while making routing decisions, the parameter APPLY ALLOCATION GROUP ON PRIMARY LEG ONLY is taken into consideration if the leg in question is not a primary leg.

Use Case 1

Carrier A operates only 40 FT trailers and Carrier B operates only 20 FT equipment groups. Carriers have unlimited capacities of equipment they carry.

Items weighing 200,000 lbs need to be packed and the equipment choices are 40 FT and 20 FT trailers. The cost/weight packed is better for a 40 FT than a 20 FT. So, if there are no constraints, the solution for this case should be five 40 FT trailers awarded to Carrier A. However with commitments, the solution is different.

Equipment 1: 40 FT equipment is selected and awarded to Carrier A. The current carrier percentages are 100%:0%. Remaining weight to be packed is 160,000 lbs.

Equipment 2: Although 40 FT is cheaper (per lb), the next equipment picked is a 20FT to get closer to the target of 50:50. The current carrier percentages are 50%:50%. Remaining weight to be packed is 140,000 lbs.

Following similar logic, the solver picks three 40 FT and three 20 FT in total to have a 50:50 usage percentages. The remaining weight to be packed is 20,000 lbs. For the last 20,000 lbs, OTM cannot have a target commitment of 50:50 regardless of the equipment picked. To minimize the cost/weight packed, OTM will pick the 20 FT.

The final solution is 3-40 FT to Carrier A and 4-20 FT to Carrier B.

Use Case 2

Carrier A has one 40 FT trailer and unlimited 20 FT trailers. Carrier B has unlimited 40 FT trailers but only two 20 FT trailers (defined in Carrier Capacities and Consider Carrier Capacity Limits is ON).

First equipment is 40 FT and can go to either one of the carriers. Let's say the solver picks Carrier A. The second equipment is also 40FT but for balance, OTM gives it to Carrier B, so the usage percentages are 50:50. OTM has to deviate from the target for the next equipment, so OTM looks solely at minimizing the cost and the next equipment selected would be a 40 FT awarded to Carrier B. The remaining weight to be packed is 80,000 lbs. The next equipment has to go to Carrier A and so a 20 FT is selected. In that way, solver selects 40 FT (Carrier B) and 20FT (Carrier A) alternatively until all weight is packed. The final solution is 1-40 FT & 2-20 FT for Carrier A and 3-40 FT for Carrier B.

Note: If Carrier capacity limits are not considered, the solution could be drastically different.

Use Case 3

Carrier A operates only 40 FT trailers and Carrier B operates only 20 FT equipment groups. Carriers have unlimited capacities of equipment they carry. One 40 FT = 2 TEU and One 20 FT = 1 TEU. Commitments are by TEUs. Total weight is 180,000 lb.

For every 40 FT trailer awarded to Carrier A, two 20 FT trailers are awarded to Carrier B although 20 FT is expensive for the weight packed. So, 160,000 lbs are packed in that fashion (2-40 FT and 4-20 FT) with usage percentages at 50:50, leaving 20,000 lbs to be packed. If a 20FT is picked, the result is 4 TEU for Carrier A and 5 TEU for Carrier B, that is 44:56 percent usage. If a 40 FT is picked, the result is 6 TEU for Carrier A and 4 TEU for Carrier B, resulting in a usage percentage of 60:40. So, for the most equal commitment, OTM will pick the 20 FT making the final solution: 2-40 FT for Carrier A and 5-20 FT for Carrier B.