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Optimal inventory control of empty containers in inland transportation system

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  • Young Yun, Won
  • Mi Lee, Yu
  • Seok Choi, Yong

Abstract

In this paper, we deal with an inventory control problem of empty containers in an inland transportation system. In inland container transportation, freights (containers) are transported between terminal and the customer's location by trucks, trains and barges. Empty containers are an important logistic resource and shipping companies try to operate and manage empty containers efficiently. Because of the trade imbalance between hub ports, empty containers should be periodically repositioned from surplus areas to shortage areas. However, it is not easy to exactly forecast the demand of empty containers, and we therefore need to build an efficient way to reposition the empty containers. In this paper, we consider a shortage area and propose an efficient inventory policy to control empty containers. We assume that demands per unit time are independent and identically distributed random variables. To satisfy the demand of empty containers, we reposition empty containers from other hubs based on the (s, S) inventory policy, and also consider the lease of empty containers with zero lead time. For the leased containers, we should return the number of empty containers leased to the leaser after the specified period. For a given policy, simulation is used to estimate the expected cost rate and we use the optimization tool, OptQuest® in Arena to obtain the near optimal (s, S) policy in numerical examples.

Suggested Citation

  • Young Yun, Won & Mi Lee, Yu & Seok Choi, Yong, 2011. "Optimal inventory control of empty containers in inland transportation system," International Journal of Production Economics, Elsevier, vol. 133(1), pages 451-457, September.
    • Handle: RePEc:eee:proeco:v:133:y:2011:i:1:p:451-457
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    References listed on IDEAS

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    1. Raymond K. Cheung & Chuen-Yih Chen, 1998. "A Two-Stage Stochastic Network Model and Solution Methods for the Dynamic Empty Container Allocation Problem," Transportation Science, INFORMS, vol. 32(2), pages 142-162, May.
    2. Li, Jing-An & Leung, Stephen C.H. & Wu, Yue & Liu, Ke, 2007. "Allocation of empty containers between multi-ports," European Journal of Operational Research, Elsevier, vol. 182(1), pages 400-412, October.
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    11. Qiu, Xuan & Lam, Jasmine Siu Lee & Huang, George Q., 2015. "A bilevel storage pricing model for outbound containers in a dry port system," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 65-83.
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    13. Mittal, Neha & Boile, Maria & Baveja, Alok & Theofanis, Sotiris, 2013. "Determining optimal inland-empty-container depot locations under stochastic demand," Research in Transportation Economics, Elsevier, vol. 42(1), pages 50-60.
    14. Najafi, Mehdi & Zolfagharinia, Hossein, 2021. "Pricing and quality setting strategy in maritime transportation: Considering empty repositioning and demand uncertainty," International Journal of Production Economics, Elsevier, vol. 240(C).
    15. Wong, Eugene Y.C. & Tai, Allen H. & Raman, Mardjuki, 2015. "A maritime container repositioning yield-based optimization model with uncertain upsurge demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 147-161.
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