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

• Published in: Transportation research. Part E, Logistics and transportation review Vol. 47; no. 4; pp. 401 - 413
• Main Authors: Meng, Qiang, Wang, Tingsong
• Format: Journal Article
• Language: English
• Published: Elsevier India Pvt Ltd 01.07.2011; Elsevier
• Series: Transportation Research Part E: Logistics and Transportation Review
• Subjects: Algorithms; Dynamic programming; Dynamic programming model; Integer linear programming model; Liners; Mathematical models; Multi-period liner ship fleet planning; Multi-period liner ship fleet planning Scenario decision tree Dynamic programming model Integer linear programming model; Policies; Purchasing; Scenario decision tree; Ships; Transportation; Multi-period liner ship fleet planning; Scenario decision tree; Integer linear programming model; Dynamic programming model
• ISSN: 1366-5545; 1878-5794
• DOI: 10.1016/j.tre.2010.12.005

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.