Medium-Term Pricing and Operations Planning in Intermodal Transportation

Li Li; Tayur, Sridhar
February 2005
Transportation Science;Feb2005, Vol. 39 Issue 1, p73
Academic Journal
Motivated by a real application that requires effective medium-term planning in intermodal transportation, we develop a mathematical programming model that jointly considers pricing and operations planning. Building on available work from marketing and transportation literature, we develop a new method for considering pricing, as well as develop distinctly different operations submodels that are appropriate for this context. We solve the resulting nonlinear optimization problem (with continuous and 0-1 variables)to optimality through a decomposition that exploits the structure of subproblems. Computational testing on industrial-sized problems shows that our algorithm is very quick, allowing for effective scenario testing and "what-if"analysis.


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