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Price planning for time-definite less-than-truckload freight services

Author

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  • Lin, Cheng-Chang
  • Lin, Dung-Ying
  • Young, Melanie M.

Abstract

Price planning simultaneous determines the service demand (with associated prices) and an operational plan to maximize a carrier's profit. We modeled this integral-constrained concave program in the link formulation and proposed an implicit enumeration embedded with Lagrangian Relaxation upper bounds to determine the optimal prices. Computations on Taiwan's time-definite less-than-truckload freight market showed that the carrier needs to simultaneously re-evaluate its network capacity while determining prices. The common practice of distance-based pricing that sets price by a base rate over direct shipment distance underestimates operating cost, specifically operating losses for short distance shipments.

Suggested Citation

  • Lin, Cheng-Chang & Lin, Dung-Ying & Young, Melanie M., 2009. "Price planning for time-definite less-than-truckload freight services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 525-537, July.
  • Handle: RePEc:eee:transe:v:45:y:2009:i:4:p:525-537
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    Cited by:

    1. Lin, Cheng-Chang & Lee, Shwu-Chiou, 2010. "The competition game on hub network design," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 618-629, May.
    2. Campbell, James F., 2013. "A continuous approximation model for time definite many-to-many transportation," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 100-112.

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