A scenario‐based dynamic programming model for multi‐period liner ship fleet planning

A scenario‐based dynamic programming model for multi‐period liner ship fleet planning

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Article ID: iaor20112737
Volume: 47
Issue: 4
Start Page Number: 401
End Page Number: 413
Publication Date: Jul 2011
Journal: Transportation Research Part E
Authors: ,
Keywords: programming: dynamic, programming: integer
Abstract:

This paper proposes a more realistic multi‐period liner ship fleet planning problem for a liner container shipping company than has been studied in previous literature. The proposed problem is formulated as a scenario‐based dynamic programming model consisting of a number of integer linear programming formulations for each single planning period, and the model can be solved efficiently by a shortest path algorithm on an acyclic network. A numerical example is carried out to illustrate the applicability of the proposed model and solution method. The numerical results show that chartering in ships may not always be a better policy for a long‐term planning horizon though it is much cheaper than buying ships in the short‐term. Purchasing ships seems to be a more profitable investment in the long run.

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