Article ID: | iaor201110112 |
Volume: | 48 |
Issue: | 1 |
Start Page Number: | 310 |
End Page Number: | 330 |
Publication Date: | Jan 2012 |
Journal: | Transportation Research Part E |
Authors: | White Chelsea C, Cheong Taesu |
Keywords: | combinatorial optimization, programming: markov decision, inspection |
We determine the value of monitoring perishable freight in‐transit for a single vehicle traveling from an origin to a destination. We develop a computationally practical approach for determining the optimal expected cost function and an optimal policy, based on an infinite horizon partially observed Markov decision process model. Structural properties of the optimal expected cost function and optimal policy are determined. These results can lend insight when deciding whether to acquire the capacity to monitor freight status in transit and what actions to take, based on the data from the in‐transit monitoring, that optimally increase expected supply chain productivity.