IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v35y2001i9p847-862.html
   My bibliography  Save this article

An investment planning model for a new North-Central railway in Brazil

Author

Listed:
  • Petersen, E. R.
  • Taylor, A. J.

Abstract

This paper presents a method for determining the optimal timing and economic feasibility of a new railway linking North and South Brazil, connecting the existing southern transportation systems to the vast agricultural and mineral wealth of the North-Central region. Possible new railway links, together with the existing road, rail and water transport system are modeled as a network. Shippers route their traffic over the network to minimize their cost, and the railway investor selects the sequence and timing of new links (if any) that maximize the present value of benefits to the investor. The problem can be formulated as a large mixed integer programming problem. However, in this paper we show that the problem can be formulated as nested dynamic programming models that can be easily implemented in a spreadsheet. The traffic assignment problem is implemented as a recursive model that is used to calculate the benefits for each possible system state. A second dynamic programming problem calculates the optimal expansion path for the system. The advantage of implementing these models in a spreadsheet is that optimal solutions are automatically recalculated if any of the data is changed. We show how this feature greatly simplifies sensitivity analysis.

Suggested Citation

  • Petersen, E. R. & Taylor, A. J., 2001. "An investment planning model for a new North-Central railway in Brazil," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(9), pages 847-862, November.
    • Handle: RePEc:eee:transa:v:35:y:2001:i:9:p:847-862
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965-8564(00)00020-3
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chu, Xuehao & Polzin, Steven E., 1998. "Considering build-later for major transit investments," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(6), pages 393-405, August.
    2. T. L. Magnanti & R. T. Wong, 1984. "Network Design and Transportation Planning: Models and Algorithms," Transportation Science, INFORMS, vol. 18(1), pages 1-55, February.
    3. Hanan Luss, 1982. "Operations Research and Capacity Expansion Problems: A Survey," Operations Research, INFORMS, vol. 30(5), pages 907-947, October.
    4. S. Rao & E. R. Petersen, 1998. "Optimal Pricing of Priority Services," Operations Research, INFORMS, vol. 46(1), pages 46-56, February.
    5. Donald Erlenkotter, 1975. "Capacity Planning for Large Multilocation Systems: Approximate and Incomplete Dynamic Programming Approaches," Management Science, INFORMS, vol. 22(3), pages 274-285, November.
    6. Teodor Gabriel Crainic & Michael Florian & José-Eugenio Léal, 1990. "A Model for the Strategic Planning of National Freight Transportation by Rail," Transportation Science, INFORMS, vol. 24(1), pages 1-24, February.
    7. Donald Erlenkotter, 1974. "Note--A Dynamic Programming Approach to Capacity Expansion with Specialization," Management Science, INFORMS, vol. 21(3), pages 360-362, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haque, Khademul & Mishra, Sabyasachee & Golias, Mihalis M., 2021. "Multi-period transportation network investment decision making and policy implications using econometric framework," Research in Transportation Economics, Elsevier, vol. 89(C).
    2. Blanco, Víctor & Puerto, Justo & Ramos, Ana B., 2011. "Expanding the Spanish high-speed railway network," Omega, Elsevier, vol. 39(2), pages 138-150, April.
    3. Setiawan, Fran & Bektaş, Tolga & Iris, Çağatay, 2025. "The role of hubs and economies of scale in network expansion," Omega, Elsevier, vol. 131(C).
    4. Fragkos, Ioannis & Cordeau, Jean-François & Jans, Raf, 2021. "Decomposition methods for large-scale network expansion problems," Transportation Research Part B: Methodological, Elsevier, vol. 144(C), pages 60-80.
    5. Ahern, Aoife & Anandarajah, Gabrial, 2007. "Railway projects prioritisation for investment: Application of goal programming," Transport Policy, Elsevier, vol. 14(1), pages 70-80, January.
    6. Andreas Bärmann & Alexander Martin & Hanno Schülldorf, 2017. "A Decomposition Method for Multiperiod Railway Network Expansion—With a Case Study for Germany," Transportation Science, INFORMS, vol. 51(4), pages 1102-1121, November.
    7. Han Zhang & Dongli Wu, 2022. "The Impact of Transport Infrastructure on Rural Industrial Integration: Spatial Spillover Effects and Spatio-Temporal Heterogeneity," Land, MDPI, vol. 11(7), pages 1-18, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hongmin Li & Stephen C. Graves & Woonghee Tim Huh, 2014. "Optimal Capacity Conversion for Product Transitions Under High Service Requirements," Manufacturing & Service Operations Management, INFORMS, vol. 16(1), pages 46-60, February.
    2. Tadashi Yamada & Bona Frazila Russ & Jun Castro & Eiichi Taniguchi, 2009. "Designing Multimodal Freight Transport Networks: A Heuristic Approach and Applications," Transportation Science, INFORMS, vol. 43(2), pages 129-143, May.
    3. Pazour, Jennifer A. & Meller, Russell D. & Pohl, Letitia M., 2010. "A model to design a national high-speed rail network for freight distribution," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(3), pages 119-135, March.
    4. Yamada, Tadashi & Febri, Zukhruf, 2015. "Freight transport network design using particle swarm optimisation in supply chain–transport supernetwork equilibrium," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 75(C), pages 164-187.
    5. Linos F. Frantzeskakis & Hanan Luss, 1999. "The network redesign problem for access telecommunications networks," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(5), pages 487-506, August.
    6. Mohammad Ebrahim Arbabian & Shi Chen & Kamran Moinzadeh, 2021. "Capacity Expansions with Bundled Supplies of Attributes: An Application to Server Procurement in Cloud Computing," Manufacturing & Service Operations Management, INFORMS, vol. 23(1), pages 191-209, 1-2.
    7. Majid Taghavi & Kai Huang, 2020. "A Lagrangian relaxation approach for stochastic network capacity expansion with budget constraints," Annals of Operations Research, Springer, vol. 284(2), pages 605-621, January.
    8. Jodlbauer, Herbert & Altendorfer, Klaus, 2010. "Trade-off between capacity invested and inventory needed," European Journal of Operational Research, Elsevier, vol. 203(1), pages 118-133, May.
    9. Agarwal, Y.K. & Aneja, Y.P. & Jayaswal, Sachin, 2022. "Directed fixed charge multicommodity network design: A cutting plane approach using polar duality," European Journal of Operational Research, Elsevier, vol. 299(1), pages 118-136.
    10. Wu, Dexiang & Wu, Desheng Dash, 2020. "A decision support approach for two-stage multi-objective index tracking using improved lagrangian decomposition," Omega, Elsevier, vol. 91(C).
    11. Joseph Y. J. Chow & Amelia C. Regan, 2011. "Real Option Pricing of Network Design Investments," Transportation Science, INFORMS, vol. 45(1), pages 50-63, February.
    12. Friesz, Terry L. & Suo, Zhong-Gui & Bernstein, David H., 1998. "A dynamic disequilibrium interregional commodity flow model," Transportation Research Part B: Methodological, Elsevier, vol. 32(7), pages 467-483, September.
    13. Melkote, Sanjay & Daskin, Mark S., 2001. "Capacitated facility location/network design problems," European Journal of Operational Research, Elsevier, vol. 129(3), pages 481-495, March.
    14. Zvi Drezner & Said Salhi, 2002. "Using hybrid metaheuristics for the one‐way and two‐way network design problem," Naval Research Logistics (NRL), John Wiley & Sons, vol. 49(5), pages 449-463, August.
    15. Ospina, Juan P. & Duque, Juan C. & Botero-Fernández, Verónica & Montoya, Alejandro, 2022. "The maximal covering bicycle network design problem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 222-236.
    16. Botor, Benjamin & Böcker, Benjamin & Kallabis, Thomas & Weber, Christoph, 2021. "Information shocks and profitability risks for power plant investments – impacts of policy instruments," Energy Economics, Elsevier, vol. 102(C).
    17. Sabet, Ehsan & Yazdani, Baback & Kian, Ramez & Galanakis, Kostas, 2020. "A strategic and global manufacturing capacity management optimisation model: A Scenario-based multi-stage stochastic programming approach," Omega, Elsevier, vol. 93(C).
    18. David Canca & Belén Navarro-Carmona & Gabriel Villa & Alejandro Zarzo, 2023. "A Multilayer Network Approach for the Bimodal Bus–Pedestrian Line Planning Problem," Mathematics, MDPI, vol. 11(19), pages 1-36, October.
    19. Bernard Gendron & Luis Gouveia, 2017. "Reformulations by Discretization for Piecewise Linear Integer Multicommodity Network Flow Problems," Transportation Science, INFORMS, vol. 51(2), pages 629-649, May.
    20. Santos, Lui­s & Coutinho-Rodrigues, João & Current, John R., 2008. "Implementing a multi-vehicle multi-route spatial decision support system for efficient trash collection in Portugal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(6), pages 922-934, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:35:y:2001:i:9:p:847-862. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.