Groupage Cargo GmbH is a freight forwarding company in the segment of less-than

truckload operations. Today, its nine depots are directly connected in a grid network

structure. Caused by new competition, the number of shipments per day is declining.

Therefore, the company thinks about changing its network structure to hub-and-spoke.

In the following tables, you will find distances and average number of pallets shipped every

day.

Figure 1: Grid network of Groupage Cargo GmbH

Table 1: Distances depot-depot

Distance [km] A B C D E F G H I

A 0 210 370 450 330 540 450 290 290

B 210 0 210 330 370 540 580 490 450

C 370 210 0 210 330 490 660 620 660

D 450 330 210 0 210 330 540 620 700

E 330 370 330 210 0 210 330 410 540

F 540 540 490 330 210 0 330 490 700

G 450 580 660 540 330 330 0 250 490

H 290 490 620 620 410 490 250 0 250

I 290 450 660 700 540 700 490 250 0

LGE 2013 Lab Report 1 Student Name

Course Instructor: Dr. Katerina Mitkovska-Trendova

Page 3

Table 2: Average number of pallets per day

Number of pallets A B C D E F G H I

A 34 47 25 34 37 23 44 27

B 23 29 41 34 26 46 45 34

C 34 21 30 36 39 30 22 42

D 43 42 44 36 49 26 29 20

E 25 39 29 22 36 49 49 48

F 21 35 35 28 24 39 45 36

G 30 45 39 48 37 32 24 39

H 21 29 43 45 32 30 32 42

I 35 36 47 50 44 43 22 40

1.2 Tasks for the initial situation

(1) How many trips are necessary to transport the current number of pallets according to table

2? Assume, that for each one-way trip one truck + driver is needed, even if the transport

distance would theoretically allow more than one trip. Each truck has a maximum capacity of

34 pallets.

(2) How many kilometers are driven each day in total?

(3) Truck costs are 100 /day, driver costs are 150 /day. Additional variable costs (fuel etc.)

are 0.4 /km. What are total daily costs of the network?

1.3 Future situation

Groupage Cargo has identified a suitable location for a central hub. Now they want to assess

the pros and cons a hub-and-spoke structure (see figure 2).

Figure 2: Possible layout of future hub-and-spoke network

LGE 2013 Lab Report 1 Student Name

Course Instructor: Dr. Katerina Mitkovska-Trendova

Page 4

Table 3: Depot-hub distances

Distance [km] Hub

A 160

B 290

C 370

D 370

E 210

F 370

G 330

H 250

I 330

Hub 0

Table 4: Depot-hub driving time

Driving time [h] Hub

A 2,3

B 4,1

C 5,3

D 5,3

E 3,0

F 5,3

G 4,7

H 3,6

I 4,7

1.4 Tasks for the future situation

(4) How many pallets receives the hub from each depot? How many pallets receives each

depo from the hub?

(5) How many trucks are necessary in each depot? Assume that each depot must be able to

perform the inbound transport to the hub as well as the outbound transport from the hub.

Each truck must return to its home depot each day.

(6) How many drivers are needed? Use the following assumptions:

a. Each driver has a maximum driving time of 10 hours per day. Load and unloading of

trucks is performed by other workers, therefore the driver can use his 10 hours entirely for

driving.

b. A second driver is used in cases that a tour depot->hub->depot consumes more than 10

hours.

(7) How many kilometers are driven each day in total?

(8) What are total daily costs of the network?

(9) Assume that a driver has not to return to his home depot, but can drive a tour such as

depot A -> hub -> depot B. Can you save drivers by using such types of tours? Calculate the

cost savings, but you must pay each driver travel expenses of 30 /night.

(10) Many LTL networks use a mixed grid/hub-and-spoke structure. Can you show by

example how such a structure could be advantageous for Groupage Cargo GmbH?