A Simulation Study for Evaluating a Slot Allocation Model for a Liner Shipping Network
Revenue management (RM) methods are still only rarely used in the liner shipping industry. Usually, skilled employees make the decisions whether to accept or reject a booking and decision support systems are not commonly used. But for maximizing a company’s profit it can be crucial to make the right decisions for each booking request and therefore such a system can make an important contribution to success. In this work, a discrete-event simulation model for container bookings is developed, including a quantitative slot allocation model which takes into account different segmentations, the network structure of liner shipping with the possibility of transshipments, and the existence of different round trips of ships on the services. With a simulation study, different scenarios, networks and input settings can be evaluated regarding their performance, to determine the best strategy for the company. In this study, the incoming bookings are simulated and the decision whether a booking is to be accepted or rejected is based on the capacity that is available in the respective booking class according to the solution of the slot allocation model. This booking limit (BL) strategy is compared to a ”first come first serve” (FCFS) strategy and to an optimal strategy (OS) which is based on the assumption that all bookings are known in advance. The results show that the BL strategy is recommendable for liner shipping companies, as it leads to significant profit increases compared to FCFS.
KeywordsEmpty Container Liner Shipping Revenue Management Slot Allocation First Come First Serve
Unable to display preview. Download preview PDF.
- 1.Bingzhou, L.: A Stochastic Model for Dynamic Capacity Allocation of Container Shipping Two-Dimensional Revenue Management. In: Proceedings of 2008 International Conference on Service System and Service Management, pp. 1–7. IEEE, Los Alamitos (2008)Google Scholar
- 2.Brooks, M., Button, K.J.: Yield Management: A Phenomenon of the 1980s and 1990s. International Journal of Transport Economics 21(2), 177–196 (1994)Google Scholar
- 3.Brooks, M.R.: Sea Change in Liner Shipping: Regulation and Managerial Decision-Making in a Global Industry. Pergamon Press, Oxford (2000)Google Scholar
- 9.Law, A.M.: Simulation Modeling & Analysis. McGraw-Hill, New York (2007)Google Scholar
- 12.Løfstedt, B., Pisinger, D., Spoorendonk, S.: Liner Shipping Cargo Allocation with Repositioning of Empty Containers. INFOR special issue on Maritime Transportation (in press) (forthcoming)Google Scholar
- 13.Lu, H.-A., Chu, C.-W., Che, P.-Y.: Seasonal slot allocation planning for a container liner shipping service. Journal of Marine Science and Technology 18(1), 84–92 (2010)Google Scholar
- 14.Maersk Line: The answer is YES. Maersk Line News (June 1, 2010), http://www.maerskline.com/link/?page=news&path=/news/story_page/10/yes, accessed (June 17, 2011)
- 15.Maragos, S.A.: Yield Management for the Maritime Industry. Ph.D. Dissertation, Massachusetts Institute of Technology (1994)Google Scholar
- 19.Xiangzhi, B., Rongqiu, C., Li, L.: Container Slot Allocation Model with Liner Shipping Revenue Management. In: Jinlong, Z., Wei, Z., Xinping, X., Jianqiao, L. (eds.) Proceedings of ICM 2007, The 6th International Conference on Management Globalization Challenge and Management Transformation., August 3-5, pp. 130–137. Science Press, Wuhan (2007)Google Scholar
- 20.Zurheide, S., Fischer, F.: A revenue management slot allocation model with prioritization for the liner shipping industry. In: Hu, B., Morasch, K., Pickl, S., Siegle, M. (eds.) Operations Research Proceedings 2010. International Conference of the German Operations Research Society 2010, September 01-03, pp. 143–148. Springer, Heidelberg (2011)Google Scholar
- 21.Zurheide, S., Fischer, F.: A revenue management slot allocation model for liner shipping networks. In: Proceedings of the International Association of Maritime Economists (IAME) 2011 Conference, Santiago de Chile, Chile (accepted) (forthcoming)Google Scholar