IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v45y2011i8p765-778.html
   My bibliography  Save this article

A network option portfolio management framework for adaptive transportation planning

Author

Listed:
  • Chow, Joseph Y.J.
  • Regan, Amelia C.
  • Ranaiefar, Fatemeh
  • Arkhipov, Dmitri I.

Abstract

A real option portfolio management framework is proposed to make use of an adaptive network design problem developed using stochastic dynamic programming methodologies. The framework is extended from Smit's and Trigeorgis' option portfolio framework to incorporate network synergies. The adaptive planning framework is defined and tested on a case study with time series origin-destination demand data. Historically, OD time series data is costly to obtain, and there has not been much need for it because most transportation models use a single time-invariant estimate based on deterministic forecasting of demand. Despite the high cost and institutional barriers of obtaining abundant OD time series data, we illustrate how having higher fidelity data along with an adaptive planning framework can result in a number of improved management strategies. An insertion heuristic is adopted to run the lower bound adaptive network design problem for a coarse Iran network with 834 nodes, 1121 links, and 10Â years of time series data for 71,795 OD pairs.

Suggested Citation

  • Chow, Joseph Y.J. & Regan, Amelia C. & Ranaiefar, Fatemeh & Arkhipov, Dmitri I., 2011. "A network option portfolio management framework for adaptive transportation planning," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(8), pages 765-778, October.
    • Handle: RePEc:eee:transa:v:45:y:2011:i:8:p:765-778
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856411000978
    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. ,, 2001. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 17(6), pages 1157-1160, December.
    2. Szeto, W.Y. & Lo, Hong K., 2008. "Time-dependent transport network improvement and tolling strategies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(2), pages 376-391, February.
    3. Lo, Hong K. & Szeto, W.Y., 2009. "Time-dependent transport network design under cost-recovery," Transportation Research Part B: Methodological, Elsevier, vol. 43(1), pages 142-158, January.
    4. ,, 2001. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 17(5), pages 1025-1031, October.
    5. Hatzopoulou, M. & Miller, E.J., 2009. "Transport policy evaluation in metropolitan areas: The role of modelling in decision-making," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 323-338, May.
    6. Snyder, Lawrence V. & Daskin, Mark S. & Teo, Chung-Piaw, 2007. "The stochastic location model with risk pooling," European Journal of Operational Research, Elsevier, vol. 179(3), pages 1221-1238, June.
    7. Saphores, Jean-Daniel M. & Boarnet, Marlon G., 2006. "Uncertainty and the timing of an urban congestion relief investment.: The no-land case," Journal of Urban Economics, Elsevier, vol. 59(2), pages 189-208, March.
    8. Joseph Chow & Choon Yang & Amelia Regan, 2010. "State-of-the art of freight forecast modeling: lessons learned and the road ahead," Transportation, Springer, vol. 37(6), pages 1011-1030, November.
    9. Salling, Kim Bang & Banister, David, 2009. "Assessment of large transport infrastructure projects: The CBA-DK model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 800-813, November.
    10. Chow, Joseph Y.J. & Regan, Amelia C., 2011. "Network-based real option models," Transportation Research Part B: Methodological, Elsevier, vol. 45(4), pages 682-695, May.
    11. Ukkusuri, Satish V. & Patil, Gopal, 2009. "Multi-period transportation network design under demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 43(6), pages 625-642, July.
    12. Alidaee, Bahram & Kochenberger, Gary A. & Amini, Mohammad M., 2001. "Greedy solutions of selection and ordering problems," European Journal of Operational Research, Elsevier, vol. 134(1), pages 203-215, October.
    13. Byung Kim & Wonkyu Kim & Byung Song, 2008. "Sequencing and scheduling highway network expansion using a discrete network design model," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(3), pages 621-642, September.
    14. 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.
    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. Joseph Y. J. Chow & Hamid R. Sayarshad, 2016. "Reference Policies for Non-myopic Sequential Network Design and Timing Problems," Networks and Spatial Economics, Springer, vol. 16(4), pages 1183-1209, December.
    2. Sayarshad, Hamid R. & Chow, Joseph Y.J., 2015. "A scalable non-myopic dynamic dial-a-ride and pricing problem," Transportation Research Part B: Methodological, Elsevier, vol. 81(P2), pages 539-554.
    3. Li, Zhi-Chun & Guo, Qian-Wen & Lam, William H.K. & Wong, S.C., 2015. "Transit technology investment and selection under urban population volatility: A real option perspective," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 318-340.
    4. Zhang, Sizhe & Cardin, Michel-Alexandre, 2017. "Flexibility and real options analysis in emergency medical services systems using decision rules and multi-stage stochastic programming," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 107(C), pages 120-140.
    5. Rath, Srushti & Liu, Bingqing & Yoon, Gyugeun & Chow, Joseph Y.J., 2023. "Microtransit deployment portfolio management using simulation-based scenario data upscaling," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    6. Krüger, Niclas A., 2012. "To kill a real option – Incomplete contracts, real options and PPP," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(8), pages 1359-1371.
    7. Karel Ječmen & Denisa Mocková & Dušan Teichmann, 2024. "Solving Transport Infrastructure Investment Project Selection and Scheduling Using Genetic Algorithms," Mathematics, MDPI, vol. 12(19), pages 1-28, September.
    8. Guo, Qian-Wen & Chen, Shumin & Schonfeld, Paul & Li, Zhongfei, 2018. "How time-inconsistent preferences affect investment timing for rail transit," Transportation Research Part B: Methodological, Elsevier, vol. 118(C), pages 172-192.
    9. Dezhi Zhang & Jiehui Jiang & Shuangyan Li & Xiamiao Li & Qingwen Zhan, 2017. "Optimal Investment Timing and Size of a Logistics Park: A Real Options Perspective," Complexity, Hindawi, vol. 2017, pages 1-12, December.

    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. Chow, Joseph Y.J. & Regan, Amelia C., 2011. "Network-based real option models," Transportation Research Part B: Methodological, Elsevier, vol. 45(4), pages 682-695, May.
    2. Guo, Qian-Wen & Chen, Shumin & Schonfeld, Paul & Li, Zhongfei, 2018. "How time-inconsistent preferences affect investment timing for rail transit," Transportation Research Part B: Methodological, Elsevier, vol. 118(C), pages 172-192.
    3. Hosseininasab, Seyyed-Mohammadreza & Shetab-Boushehri, Seyyed-Nader, 2015. "Integration of selecting and scheduling urban road construction projects as a time-dependent discrete network design problem," European Journal of Operational Research, Elsevier, vol. 246(3), pages 762-771.
    4. Hosseininasab, Seyyed-Mohammadreza & Shetab-Boushehri, Seyyed-Nader & Hejazi, Seyed Reza & Karimi, Hadi, 2018. "A multi-objective integrated model for selecting, scheduling, and budgeting road construction projects," European Journal of Operational Research, Elsevier, vol. 271(1), pages 262-277.
    5. W. Szeto & Y. Jiang & D. Wang & A. Sumalee, 2015. "A Sustainable Road Network Design Problem with Land Use Transportation Interaction over Time," Networks and Spatial Economics, Springer, vol. 15(3), pages 791-822, September.
    6. Jingyi Xue, 2018. "Fair division with uncertain needs," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(1), pages 105-136, June.
    7. Slotnick, Susan A., 2011. "Order acceptance and scheduling: A taxonomy and review," European Journal of Operational Research, Elsevier, vol. 212(1), pages 1-11, July.
    8. Tarhan, İstenç & Oğuz, Ceyda, 2022. "A matheuristic for the generalized order acceptance and scheduling problem," European Journal of Operational Research, Elsevier, vol. 299(1), pages 87-103.
    9. Li, Zhi-Chun & Guo, Qian-Wen & Lam, William H.K. & Wong, S.C., 2015. "Transit technology investment and selection under urban population volatility: A real option perspective," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 318-340.
    10. Zheng, Shiyuan & Wang, Kun & Chan, Felix T.S. & Fu, Xiaowen & Li, Zhi-Chun, 2022. "Subsidy on transport adaptation investment-modeling decisions under incomplete information and ambiguity," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 103-129.
    11. Peng, Ya-Ting & Li, Zhi-Chun & Schonfeld, Paul, 2019. "Development of rail transit network over multiple time periods," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 235-250.
    12. Somaye Geramipour & Ghasem Moslehi & Mohammad Reisi-Nafchi, 2017. "Maximizing the profit in customer’s order acceptance and scheduling problem with weighted tardiness penalty," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(1), pages 89-101, January.
    13. Mestry, Siddharth & Damodaran, Purushothaman & Chen, Chin-Sheng, 2011. "A branch and price solution approach for order acceptance and capacity planning in make-to-order operations," European Journal of Operational Research, Elsevier, vol. 211(3), pages 480-495, June.
    14. Guo, Qianwen & Chen, Shumin & Sun, Yanshuo & Schonfeld, Paul, 2023. "Investment timing and length choice for a rail transit line under demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 175(C).
    15. Anny B. Wang & W. Y. Szeto, 2020. "Bounding the Inefficiency of the Reliability-Based Continuous Network Design Problem Under Cost Recovery," Networks and Spatial Economics, Springer, vol. 20(2), pages 395-422, June.
    16. Dolf Talman & Zaifu Yang, 2012. "On a Parameterized System of Nonlinear Equations with Economic Applications," Journal of Optimization Theory and Applications, Springer, vol. 154(2), pages 644-671, August.
    17. Subramanian, S.V. & Subramanyam, Malavika A. & Selvaraj, Sakthivel & Kawachi, Ichiro, 2009. "Are self-reports of health and morbidities in developing countries misleading? Evidence from India," Social Science & Medicine, Elsevier, vol. 68(2), pages 260-265, January.
    18. World Bank, 2002. "Costa Rica : Social Spending and the Poor, Volume 1. Summary of Issues and Recommendations with Executive Summary," World Bank Publications - Reports 15330, The World Bank Group.
    19. Emin Karagözoğlu, 2014. "A noncooperative approach to bankruptcy problems with an endogenous estate," Annals of Operations Research, Springer, vol. 217(1), pages 299-318, June.
    20. Hernández-Hernández, M.E. & Kolokoltsov, V.N. & Toniazzi, L., 2017. "Generalised fractional evolution equations of Caputo type," Chaos, Solitons & Fractals, Elsevier, vol. 102(C), pages 184-196.

    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:45:y:2011:i:8:p:765-778. 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.