Price planning for time-definite less-than-truckload freight services

Cheng-Chang Lin, Dung-Ying Lin and Melanie M. Young

Transportation Research Part E: Logistics and Transportation Review, 2009, vol. 45, issue 4, 525-537

Abstract: Price planning simultaneous determines the service demand (with associated prices) and an operational plan to maximize a carrier's profit. We modeled this integral-constrained concave program in the link formulation and proposed an implicit enumeration embedded with Lagrangian Relaxation upper bounds to determine the optimal prices. Computations on Taiwan's time-definite less-than-truckload freight market showed that the carrier needs to simultaneously re-evaluate its network capacity while determining prices. The common practice of distance-based pricing that sets price by a base rate over direct shipment distance underestimates operating cost, specifically operating losses for short distance shipments.

Keywords: Pricing; Logistics; Hub-and-spoke; network; Lagrangian; Relaxation; Implicit; enumeration (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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