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A revenue management model for sea cargo

Author

Listed:
  • L.H. Lee
  • E.P. Chew
  • M.S. Sim

Abstract

In this paper, we introduce a revenue management model for an ocean carrier with two classes of orders, namely the ad hoc orders and the contractual orders. When the contractual order is accepted, the carrier can either deliver it immediately or postpone to the next ship on the shipping schedule. This problem is formulated as a stochastic dynamic programming model. We show the existence of the optimal threshold policy. Some important properties of the threshold policy are discussed. Finally, the numerical result shows that the percentage improvement of the threshold policy over an existing policy may be as high as 199%.

Suggested Citation

  • L.H. Lee & E.P. Chew & M.S. Sim, 2009. "A revenue management model for sea cargo," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 6(2), pages 195-222.
    • Handle: RePEc:ids:ijores:v:6:y:2009:i:2:p:195-222
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    Citations

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    Cited by:

    1. Guo, Wenjing & Atasoy, Bilge & van Blokland, Wouter Beelaerts & Negenborn, Rudy R., 2021. "Global synchromodal transport with dynamic and stochastic shipment matching," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    2. Wang, Tingsong & Meng, Qiang & Wang, Shuaian & Qu, Xiaobo, 2021. "A two-stage stochastic nonlinear integer-programming model for slot allocation of a liner container shipping service," Transportation Research Part B: Methodological, Elsevier, vol. 150(C), pages 143-160.
    3. Hua-An Lu & Wen-Hung Mu, 2016. "A slot reallocation model for containership schedule adjustment," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(1), pages 136-157, January.
    4. Ming Yin & Zheng Wan & Kap Hwan Kim & Shi Yuan Zheng, 2019. "An optimal variable pricing model for container line revenue management systems," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(2), pages 173-191, June.
    5. Wang, Tingsong & Tian, Xuecheng & Wang, Yadong, 2020. "Container slot allocation and dynamic pricing of time-sensitive cargoes considering port congestion and uncertain demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 144(C).
    6. Hui Zhao & Qiang Meng & Yadong Wang, 2022. "Robust container slot allocation with uncertain demand for liner shipping services," Flexible Services and Manufacturing Journal, Springer, vol. 34(3), pages 551-579, September.
    7. Wang, Yadong & Gu, Yuyun & Wang, Tingsong & Zhang, Jun, 2022. "A risk-averse approach for joint contract selection and slot allocation in liner container shipping," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    8. Meng, Qiang & Zhao, Hui & Wang, Yadong, 2019. "Revenue management for container liner shipping services: Critical review and future research directions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 280-292.

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