Article ID: | iaor2006904 |
Country: | United States |
Volume: | 39 |
Issue: | 1 |
Start Page Number: | 73 |
End Page Number: | 86 |
Publication Date: | Feb 2005 |
Journal: | Transportation Science |
Authors: | Tayur Sridhar, Li Li |
Keywords: | planning, programming: nonlinear |
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.