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Ride service outsourcing for profit maximization

Author

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  • Li, Yihua
  • Wang, Xiubin
  • Adams, Teresa M.

Abstract

Transportation service subcontracting is becoming an effective means of business for many leading carriers to maintain their market dominance and profitability. This research is based on an outsourcing practice in one of the few largest limousine fleet companies in the US, whose (mostly advance) demand for services often exceeds its capacity. We develop a model for ride service outsourcing. A column generation method is proposed. The outsourcing decision is made simultaneously with pre-scheduling of in-house ride services as well as staffing. Test with services data indicates that the developed method dramatically improves the carrier's outsourcing decision.

Suggested Citation

  • Li, Yihua & Wang, Xiubin & Adams, Teresa M., 2009. "Ride service outsourcing for profit maximization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(1), pages 138-148, January.
    • Handle: RePEc:eee:transe:v:45:y:2009:i:1:p:138-148
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    Citations

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    Cited by:

    1. Ching-Hui Tang, 2018. "Two-stage stochastic modeling of transportation outsourcing plans for transshipment centers," 4OR, Springer, vol. 16(1), pages 67-94, March.
    2. Yihua Li & Lila Rasekh & Xiubin Bruce Wang & Qing Miao, 2016. "Stochastic model for hotel room pricing and upgrading," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 15(6), pages 500-508, December.
    3. Zhu, Xiaowei, 2016. "Managing the risks of outsourcing: Time, quality and correlated costs," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 121-133.

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