Price planning simultaneous determines the service demand (with associated prices) and an operational plan to maximize a carrier's profit. We modeled this integral-constrained concave program in the link formulation and proposed an implicit enumeration embedded with Lagrangian Relaxation upper bounds to determine the optimal prices. Computations on Taiwan's time-definite less-than-truckload freight market showed that the carrier needs to simultaneously re-evaluate its network capacity while determining prices. The common practice of distance-based pricing that sets price by a base rate over direct shipment distance underestimates operating cost, specifically operating losses for short distance shipments.
|Number of pages||13|
|Journal||Transportation Research Part E: Logistics and Transportation Review|
|Publication status||Published - 2009 Jul|
All Science Journal Classification (ASJC) codes
- Business and International Management
- Civil and Structural Engineering