Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/23807
Title: Transportation procurement with seasonally varying shipper demand and volume guarantees
Authors: Lim, A
Rodrigues, B
Xu, Z 
Keywords: Transportation
Models
Assignment
Transportation allocation
Programming
Integer applications
Large-scale integer optimization
Industrial
Transportation/shipping
Transportation procurement optimization
Issue Date: 2008
Publisher: Institute for Operations Research and the Management Sciences
Source: Operations research, 2008, v. 56, no. 3, p. 758-771 How to cite?
Journal: Operations research 
Abstract: Transportation companies that operate in seasonal markets where differences in demand occur in peak and nonpeak periods often negotiate for some form of demand smoothing with the customer—i.e., the shipper. In this paper, we study a shipper's transportation procurement model, in which the shipper gives assurances, through volume guarantees negotiated with the transportation companies, that shipments made in nonpeak periods will be commensurate with shipments in peak periods. The shipper uses the model in an auction process, in which the transportation companies bid for routes giving prices and capacity limits, to procure freight services from the companies, which minimizes its total transportation costs. The model is formulated as an integer programming problem that is shown to be strongly N P-hard even for a single-route network. We develop a solution approach that builds on the solution of the subproblem when only one transportation company is available to construct heuristic algorithms, including a linear programming relaxation-based method. Worst-case analysis is given, and the effectiveness of the algorithms is tested in numerical experimentation. By examining parameter sensitivity, insight is provided on how the algorithms can be used by the shipper for making procurement decisions. The practical usefulness of the model and the solution approaches is substantiated by its deployment with a multinational shipper.
URI: http://hdl.handle.net/10397/23807
ISSN: 0030-364x
EISSN: 1526-5463
DOI: 10.1287/opre.1070.0481
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

18
Citations as of Feb 26, 2017

WEB OF SCIENCETM
Citations

19
Last Week
1
Last month
0
Citations as of Aug 14, 2017

Page view(s)

44
Last Week
0
Last month
Checked on Aug 20, 2017

Google ScholarTM

Check

Altmetric



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.