 Price-Directed Control of a Closed Logistics Queueing NetworkDaniel Adelman ()
Operations Research, 2007, vol. 55, issue 6, 1022-1038 Abstract: Motivated by one of the leading intermodal logistics suppliers in the United States, we consider an internal pricing mechanism for managing a fleet of service units (shipping containers) flowing in a closed queueing network. Nodes represent geographic locations, and arcs represent travel between them. Customer requests for arcs arrive over time, and the problem is to find an accept/reject policy that maximizes the long-run time average reward rate from accepting requests. We formulate the problem as a semi-Markov decision process and give a simple linear program that provides an upper bound on the optimal reward rate. Using Palm calculus, we derive a nonlinear program that approximately captures queueing and stockout effects on the network. Using its optimal Lagrange multipliers, we construct a simple functional approximation to the dynamic programming value function. The resulting policy is computationally efficient and produces superior economic performance as compared with other policies. Furthermore, it provides a methodologically grounded solution to the firm's internal pricing problem. Keywords: dynamic programming/optimal control; semi-Markov; programming; nonlinear; queues; networks; industries; transportation/shipping (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:55:y:2007:i:6:p:1022-1038 Access Statistics for this article More articles in Operations Research from INFORMS Contact information at EDIRC. |
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