Network Design for Strategic Alliance in Express Courier Services

Recently, the demand for the direct shipment of purchased goods by express couriers has increased as the result of an explosive growth in e-tailing, telemarketing, and TV home-shopping industries. However, since too many express courier companies have been emerging over the last several years, competitiveness for market share is very severe among them. This study suggests a network design model for strategic alliance in order to overcome the circumstances in hot express courier service market. We propose an integer programming model and a solution procedure based on maxmin criterion. To demonstrate practicality and efficiency of the proposed model and solution procedure, a numerical example is derived and tested.