Multi-period maritime logistics network optimization using mixed integer programming

Indonesia, as an archipelago country, is dependent to maritime logistics on transporting goods and transportation. However, its performance is still poor, indicated by high cost of logistics. Designing maritime logistics network is crucial for shipping company on developing their business. The objective of this research is to design a liner shipping logistics network on multi-period planning horizon using mixed integer programming with maximizing profit as objective function. Three given scenarios (fixed route and fleet size, fixed route but fleet size may increase, and random route and fleet size) are analyzed for ten years within three different conditions of demand (demand equals to forecasted demand, demand equals to forecasted demand of certain period, and demand is constant). The result shows that the second scenario gives the most satisfying result of objective function in profit and fleet allocation variables. The third scenario gives the highest profit on every condition and first scenario has the lowest number of vessels. The profit margin between the third and second scenario on each condition are 2.99%, 1.32%, and 0.004 % and fleet allocation gap between the first and second scenario are 1 ship, 1 ship, 0 ship respectively.