Adding Transportation Policies (Simulation)

Transportation policies describe how material flows throughout a supply chain. In Cosmic Frog, we can define our transportation policies using the Transportation Policies and Transportation Modes tables. In general, we can have a unique policy for each combination of origin, destination, product, and transport mode.

Typically in simulation models, transportation policies are defined over the group of all products (which can be done by leaving Product Name blank as is done in the screenshot above), unless some products need to be prevented from being combined into shipments together on the same mode. If Transportation Policies list products explicitly, these products will not be combined in shipments.

In this documentation, we will first cover the available transportation policies, and in the sections after other transportation characteristics that can be specified in the Transportation Policies table will be discussed.

Available Transportation Simulation Policies

Currently supported transportation simulation policies are:

• On Quantity / On Volume / On Weight
• By Preference
• By Due Date

On Volume / Weight / Quantity

Selecting “On Volume”, “On Weight”, or “On Quantity” as a simulation policy means that either the volume, weight, or quantity of the shipment will determine which transportation mode is selected. In this case, the “Simulation Policy Value” defines the lowest volume that will go by that mode. We can use multiple lines to define multiple breakpoints for this policy.

1. We are on the Transportation Policies table.
2. Origin Name, Destination Name, Product Name (not shown, left blank for all records), and Mode Name – these define a mode of a transportation lane (a lane is an origin-destination-product combination): the rules and other characteristics specified in the record apply to this origin-destination-product-mode combination. Note that Mode Name needs to match a Mode specified in the Transportation Modes table.
3. Simulation Policy and Simulation Policy Value – what the simulation policy and its value field are set to determine how a mode is picked for the origin-destination-product combination, if multiple modes are available. Options for Simulation Policy are: By Preference, By Due Date, On Quantity, On Volume, and On Weight. The latter 3 will be explained in the next bullet points, and the first 2 in the next 2 screenshots.
4. The lane DC_VA to CZ_MA has 3 possible modes (for all products traveling on this lane), W0, W2500 and W7500. Its simulation policy is set to On Weight, with the Simulation Policy Value matching the mode names: 0, 2500, and 7500, respectively. This means that from a weight of 0 pounds, the W0 mode will be used, until a weight of 2500 pounds is reached. From a weight of 2500 pounds, the W2500 mode will be used. And shipments of 7500 pounds and over will use the W7500 mode. Not shown in the screenshot is that the unit cost goes down with increasing weight: $10 per unit for the W0 mode, $5 per unit for the W2500 mode and $2 per unit for the W7500 mode (specified in the Unit Cost and Unit Cost UOM fields further right in the Transportation Policies table).
5. The lane DC_IL to CZ_OH has 3 possible modes (for all products traveling on this lane), Q0, Q400 and Q1000. Its simulation policy is set to On Quantity, with the Simulation Policy Value matching the mode names: 0, 400, and 1000, respectively. This means that from a quantity of 0 units, the Q0 mode will be used, until a quantity of 400 units is reached. From a quantity of 400 units, the Q400 mode will be used. And shipments of 1000 units and over will use the Q1000 mode. Not shown in the screenshot is that the unit cost goes down with increasing number of units: $10 per unit for the Q0 mode, $5 per unit for the Q400 mode and $2 per unit for the Q1000 mode (specified in the Unit Cost and Unit Cost UOM fields further right in the Transportation Policies table).
6. The lane DC_AZ to CZ_WA has 3 possible modes (for all products traveling on this lane), V0, V200 and V1000. Its simulation policy is set to On Volume, with the Simulation Policy Value matching the mode names: 0, 200, and 1000, respectively. This means that from a volume of 0 cubic foot, the V0 mode will be used, until a volume of 200 cubic foot is reached. From a volume of 200 cubic foot, the V200 mode will be used. And shipments of 1000 cubic foot and over will use the V1000 mode. Not shown in the screenshot is that the unit cost goes down with increasing volume: $10 per cubic foot for the V0 mode, $5 per cubic foot for the V200 mode and $2 per cubic foot for the V1000 mode (specified in the Unit Cost and Unit Cost UOM fields further right in the Transportation Policies table).

Please note that the units of measures for the On Quantity, On Volume, and On Weight simulation policies are fixed to be units, cubic foot, and pounds and cannot be changed by the user currently.

By Preference

If “By Preference” is selected, we can provide a ranking describing which transportation mode we want to use for different origin-destination-product combinations. We can describe our preference using the “Simulation Policy Value” column.

This screenshot shows that all MFG to DC transportation lanes only have 1 Mode of Container and the Simulation Policy is set to By Preference for all of them. If there are multiple Modes available, the By Preference policy will select them pending availability in the order of preference specified by the Simulation Policy Value field, the lowest value being the most preferred mode. If there were 2 modes available and the policy set to By Preference, where 1 mode has a simulation policy value of 1 and the other of 2, the Mode with simulation policy value = 1 will be used if available, if it is not available, the mode with simulation policy value = 2 will be used.

In the following example, the “Container” mode is preferred over the “Truck” mode for the MFG_CA to DC_IL route. Note that since the “Product Name” column is left blank, this policy applies to all products using this route.

By Due Date

Selecting “By Due Date” is like “By Preference” in that different modes can be ranked via the “Simulation Policy Value”. However, selecting “By Due Date” adds the additional component of demand timing into its selection. This policy selects the highest preference option that can meet the due date of the shipment. The following screenshot shows that the By Due Date simulation policy is used on certain DC to CZ lanes where 2 Modes are used, Truck and Parcel:

1. CZ_MA can be served from DC_AZ, DC_IL, and DC_VA (sourcing choice is made based on rules specified in the Customer Fulfillment Policies sourcing policy table, which is covered in this Help Center article). If DC_AZ is chosen as the source, both a Truck and a Parcel Mode are available. Since the Simulation Policy is set to By Due Date, the highest priority mode (the one with the smallest Simulation Policy Value) that can get the shipment to the destination by the due date will be chosen. In this case Truck is the highest priority Mode as it works out cheaper than Parcel usually ($350 fixed cost for Truck vs $2/unit for Parcel), but by Truck the Transport Time takes 12.5 days, whereas for Parcel it only takes 3.5 days. So, for orders with a due date less than 3.5 days, the Parcel mode will always be chosen.
2. If DC_IL is chosen as the source for CZ_MA, then only the Truck mode is available.
3. If DC_VA is chosen as the source for CZ_MA, then 3 On Weight modes are available, see screenshot further above in the On Quantity / Volume / Weight section.

Transportation Costs, Transport Distance & Time

1. Fixed Cost – the total cost of a shipment for this Lane Mode combination.
2. Unit Cost and its UOM field (latter not shown in screenshot above) – the variable cost and how it applies for this Lane Mode combination.
3. Transport Distance and its UOM field (latter not shown in screenshot above) – specifies the distance from the origin to the destination, using the mode specified. If user does not enter a distance, then the simulation will calculate it based on the latitudes and longitudes of the origin and destination. This distance is used in case distance-based costs have been specified and/or to calculate transport time from when not set (transport time = transportation distance / average speed set on the Model Settings table).
4. Transport Time and its UOM field – specifies the time a shipment takes from the origin to the destination, using the mode specified. If a user does not enter a transport time, the simulation will calculate it based on the transport distance and average speed set in the Model Settings table.
5. This DC_AZ to CZ_MA lane using the Truck mode is the number 1 choice for the By Due Date policy used on this lane (see screenshot previous section). The cost structure for using the Truck mode is a fixed one: each shipment costs $350. The simulation logic determines how much is on a shipment when it is dispatched and each shipment is then costed individually. We also see that the Transport Distance and Transport Time fields are populated for this mode, where Transport Time is 12.5 days. This is used when determining if the mode can get the product to the customer by the due date.
6. This DC_AZ to CZ_MA lane using the Parcel mode is the number 2 choice for the By Due Date policy used on this lane (see screenshot previous section). The cost structure for using the Parcel mode is a variable one: the cost for each unit using this mode is $2 (the UOM field is set to EA, not shown in the screenshot). The options on how the variable cost is applied include quantity, volume, weight, distance, time, and combinations of quantity/volume/weight with time or distance. For example, if the UOM field is set the EA-MI, it means the variable unit cost is applied per unit per mile traveled.

Other Simulation Specific Fields on the Transportation Policies Table

There are a few other fields on the Transportation Policies table that the Throg simulation engine will take into account if populated:

• Duty Rate – duties will be calculated based on the rate set in this field (enter 10 for a rate of 10%) and the value of the product moving over this Lane Mode combination, based on the Unit Value set for the product(s) being moved in the Products table.
• Load Process Name – if a Process representing the loading of a shipment using this Lane Mode combination is specified in the Processes table, it can be associated with the transportation policy through this field.
• Unload Process Name – if a Process representing the unloading of a shipment using this Lane Mode combination is specified in the Processes table, it can be associated with the transportation policy through this field.