Logistic network profitability analysis: a new computing method

This paper offers a method for evaluating the profitability of operation sites (OS) of less-than-truckload (LTL) carriers conveying shipments through a network with multiple OS. The evaluation of the profitability of each one of these OS is a complex problem. Due to exchanges of shipments between OS, the revenues of one OS are intertwined with the revenues of other OS. Traditional accounting methods show themselves cumbersome when employed to evaluate the profitability of OS of a logistical network of interdependent OS. The method described in this paper overcomes these difficulties by means of the concept of contribution margin.

Logistics; logistical economics; transportation network

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