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Modeling is an extremely powerful tool for the analysis of logistics systems. When faced with the task of planning and managing logistics systems, most practitioners start by constructing a mental picture (or model) of the situation. This model is then used to develop and test possible courses of action. However, as supply chains and associated logistical systems become more and more complex, the mental map required to accurately represent the real world situation becomes so large and complex that it is virtually impossible to rely solely on intuitive methods. An alternative is to build a mathematical or computer-based model that reliably mimics the behavior of the real world system. This model can then take care of managing the data and performing the required calculations while the practitioner concentrates on developing scenarios, interpreting results, and making decisions.
Modeling techniques can be applied to all aspects of the supply chain and to strategic, tactical, and operational planning and management. This chapter focuses on systems modeling, in particular on modeling the transport-related aspects of freight logistics. It provides an overview of the role of freight and logistics modeling in an organization; the types of problems that are amenable to modeling; an introduction to modeling techniques; and a discussion of issues involved with development and implementation of freight and logistics models.
When a company is designing its new logistics network, it will take into account all the location elements such as customer market, labor pool, quality of life requirements, and government incentives. When these elements have been analyzed, it is possible to create models which give companies more of an insight into the choices that they make.
There are a number of modeling techniques, which can be used, each coming with its own benefits and pitfalls.
Logistic models are statistical models that describe the relationship between a qualitative dependent variable and an independent variable.
