Solving the Air Cargo Space Allocation Problem of a Digital Logistics Company by Mathematical Programming

Abstract

This paper presents an integer quadratic programming model for solving the air cargo allocation problem of a digital logistics company. The objective is to minimize the average annual cost of booking air cargo space, which the subject company pays while also getting the optimal space to be reserved by the company monthly in a year. The model includes constraints on satisfying the demand in terms of gross weight, and the required order multiples. Results for the three destinations selected for the present study by the Operations Department of the company indicate a significant reduction in the average annual air cargo booking cost.