Academics / Undergraduate Program / Client Project Challenge / ProjectRedesigning the Geographical Territories for UPS Chicago
UPS has asked Northwestern industrial engineering students to determine the optimal customer-hub assignment pairings to minimize overall travel time and ultimately redraw the feeder system map of Chicago. This will ensure operational efficiency at UPS hubs once this reduction in the number of hubs occurs. We developed a mixed-integer mathematical model that returns the optimal customer-hub assignment pairings and additional volumes processed at each UPS hub over a given 49 day period during non-peak season. Building on the optimal solution, we pre-assigned clusters of customers on territory borders to specific hubs in order to produce a final map with clean boundaries. This feasible solution results in annual savings of 3100 hours of drive time, $148,920 (not including cost savings from closure of a feeder hub), and 46 tons of CO2 emission. Although our solution tolerates some excess volume, it was important to require that the average utilization rates are high, but do not overwhelm the UPS feeder system at a particular hub. Our solution yields a maximum average daily utilization rate of 87.86%, indicating that no hub is close to capacity on the majority of days in our solution.
Our final deliverables for UPS include a list of customer-assignment pairings, a Tableau dashboard which features a map of these pairings, as well as metrics on the utilization and package volumes at each hub, sortable by day of week, and a spreadsheet detailing the changes to drive times and excess package volumes between the baseline and our solution. We also present boundaries for each hub’s associated package-pickup region, along with the names of the major roads that form the boundaries. Our client specified that such maps would help them maintain our solution, by allowing them to visualize and place new customers into their respective solutions.
A full report on this project is available by request to jill.wilson@northwestern.edu.
Team Members: Karan Agrawal, Abby Brandt, Bannasorn (Boss) Paspanthong, Ruramai Zimuto
Advisor: Prof. Andreas Wächter