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...superiority. Many applications exist to optimize these functions in isolation, and perform well in relatively static conditions where each function can successfully operate with relative independence of the other. Many industries, including most commodities, face production and distribution variables that are uniquely complex and interdependent. A machine breaks down, a team leader falls sick, weather shuts down airports and interrupts service. These everyday events can wreak havoc with pre-determined routes or fixed schedules, causing production bottlenecks, missed orders, or understaffing for customer service calls. These problems exist in the complex and highly networked realities of today's business world and cascade down production lines, along supply chains, and through organizations. For Southwest Airlines, cargo is a major revenue source, but its cargo routing system was subject these type of inefficiencies, including congestion and bottlenecks at major hubs, unnecessary cargo transfers that wasted personnel time and cut into profits, and overnight volumes that sometimes became excessive. Efforts to improve cargo handling at individual hub airports were only partly successful; what was needed was a way to improve the efficiency of cargo movement through the entire system. COPYRIGHT 2003 NUTECH SOLUTIONS 2 ROUTING OPTIMIZATION NuTech Solutions was brought in to create a new approach for routing cargo throughout the airline's flight network. NuTech Solutions created an agent-based model that simulated the cargo routing decisions made by the freight house agents and the ad-hoc routing decisions made by ramp personnel. Using historical data, comparisons were made between the routing decisions recorded in tracking logs and a variety of strategies implemented in software. These comparisons revealed that there were many opportunities to load cargo on a plane going to the correct destination, but these were not in the "published" lists of connecting flights used in the routing software. In addition, cargo handlers often used a strategy of putting cargo on the next plane headed in a generally correct direction, instead of looking at the final destination of the plane. This resulted in unnecessary transfers, and cargo was sometimes marooned overnight on the way to its destin...