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Air-cargo capacity allocation for multiple freight forwarders

Author

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  • Amaruchkul, Kannapha
  • Lorchirachoonkul, Vichit

Abstract

We consider a single air-cargo carrier, which wants to allocate cargo capacity to multiple forwarders before a booking horizon starts. A contribution that the carrier earns from each forwarder is based on the actual allotment usage at the end of the horizon. The airline's problem is to choose the allotments that maximize the expected total contribution. We derive a probability distribution of the actual usage by using a discrete Markov chain and solve the problem by using a dynamic programming method. Two heuristics for a large-scale allocation problem are also proposed, and their performances are tested via numerical experiments.

Suggested Citation

  • Amaruchkul, Kannapha & Lorchirachoonkul, Vichit, 2011. "Air-cargo capacity allocation for multiple freight forwarders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(1), pages 30-40, January.
    • Handle: RePEc:eee:transe:v:47:y:2011:i:1:p:30-40
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    Citations

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    Cited by:

    1. Shaban, Ibrahim Abdelfadeel & Chan, F.T.S. & Chung, S.H., 2021. "A novel model to manage air cargo disruptions caused by global catastrophes such as Covid-19," Journal of Air Transport Management, Elsevier, vol. 95(C).
    2. Moussawi-Haidar, Lama & Nasr, Walid & Jalloul, Maya, 2021. "Standardized cargo network revenue management with dual channels under stochastic and time-dependent demand," European Journal of Operational Research, Elsevier, vol. 295(1), pages 275-291.
    3. Choi, Jong Hae, 2023. "The value of time and the impact on the air freight product portfolio - A study of the South Korean market 2017–2021," Journal of Air Transport Management, Elsevier, vol. 109(C).
    4. Bo Feng & Jixin Zhao & Zheyu Jiang, 2022. "Robust pricing for airlines with partial information," Annals of Operations Research, Springer, vol. 310(1), pages 49-87, March.
    5. Shaban, I.A. & Wang, Z.X. & Chan, F.T.S. & Chung, S.H. & Eltoukhy, A.E.E. & Qu, T., 2019. "Price setting for extra-baggage service for a combination carrier using the newsvendor setup," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 1-14.
    6. Giuliano, Genevieve & Showalter, Catherine & Yuan, Quan & Zhang, Rui, 2018. "Managing the Impacts of Freight in California," Institute of Transportation Studies, Working Paper Series qt6614p4js, Institute of Transportation Studies, UC Davis.
    7. Bo Feng & Zheyu Jiang & Fujun Lai, 2020. "Robust approach for air cargo freight forwarder selection under disruption," Annals of Operations Research, Springer, vol. 291(1), pages 339-360, August.
    8. Zhang, Canrong & Xie, Fanrui & Huang, Kun & Wu, Tao & Liang, Zhe, 2017. "MIP models and a hybrid method for the capacitated air-cargo network planning and scheduling problems," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 103(C), pages 158-173.
    9. Moussawi-Haidar, Lama, 2014. "Optimal solution for a cargo revenue management problem with allotment and spot arrivals," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 72(C), pages 173-191.
    10. Van Asch, Thomas & Dewulf, Wouter & Kupfer, Franziska & Cárdenas, Ivan & Van de Voorde, Eddy, 2020. "Cross-border e-commerce logistics – Strategic success factors for airports," Research in Transportation Economics, Elsevier, vol. 79(C).

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