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Bulk ship fleet renewal and deployment under uncertainty: A multi-stage stochastic programming approach

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  • Arslan, Ayşe N.
  • Papageorgiou, Dimitri J.

Abstract

Faced with simultaneous demand and charter cost uncertainty, an industrial shipping company must determine a suitable fleet size, mix, and deployment strategy to satisfy demand. It acquires vessels by time chartering and voyage chartering. Time chartered vessels are acquired for different durations, a decision made before stochastic parameters are known. Voyage charters are procured for a single voyage after uncertain parameters are realized. We introduce the first multi-stage stochastic programming model for the bulk ship fleet renewal problem and solve it in a rolling horizon fashion. Computational results indicate that our approach outperforms traditional methods relying on expected value forecasts.

Suggested Citation

  • Arslan, Ayşe N. & Papageorgiou, Dimitri J., 2017. "Bulk ship fleet renewal and deployment under uncertainty: A multi-stage stochastic programming approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 69-96.
    • Handle: RePEc:eee:transe:v:97:y:2017:i:c:p:69-96
    DOI: 10.1016/j.tre.2016.10.009
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