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Optimal container dispatching policy and its structure in a shuttle service with finite capacity and random demands

Lookup NU author(s): Professor Jingxin DongORCiD

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Abstract

This paper considers the container-dispatching problem including laden container distributing and empty container repositioning in a two-terminal shuttle service with finite shipping capacity and random customer demands. Unmet demands within one period due to unavailable shipping capacity or insufficient empty containers will be lost based on the assumption that customers have limited patience and the fact that container shipping is a highly competitive sector. The objective is to seek effective container dispatching policies by minimising the total costs incurred by container inventory, container repositioning and lost sales. The optimal dispatching policy is derived by applying the Markov decision process theory. The structural characteristics of the optimal policy are investigated through numerical examples. Based on these structural properties, a four-parameter threshold police is constructed. A range of numerical examples demonstrates that the proposed threshold policy performs extremely close to or indeed the same as the optimal policy. More importantly, the proposed policy has an explicit form, which is easy-to-understand and easy-to-operate from the managerial and operational perspectives.

Publication metadata

Author(s): Song DP, Dong JX, Roe M

Publication type: Article

Publication status: Published

Journal: International Journal of Shipping and Transport Logistics

Year: 2010

Volume: 2

Issue: 1

Pages: 44-58

Print publication date: 01/01/2010

ISSN (print): 1756-6517

ISSN (electronic): 1756-6525

Publisher: Inderscience Publishers

URL: http://dx.doi.org/10.1504/IJSTL.2010.029896

DOI: 10.1504/IJSTL.2010.029896

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