MARKOVIAN DECISION PROCESSES IN SHIPMENT CONSOLIDATION

This paper discusses a discrete-time Markovian decision process (MDP) approach for determining when to release consolidated loads. The authors assume that the shipper controls the timing of each load dispatch. Thus, whenever a customer places an order, a choice must be made between dispatching this order (plus all others waiting) immediately, or continuing to consolidate until at least the arrival of the next order. These MDP models of shipment consolidation consider movement by for-hire transportation (common carriage) or by a firm's own vehicles (private fleet). Small but realistic numerical examples illustrate the application of these models and the data-aggregation issues that must be resolved. Two minimization criteria are considered: cost per unit time, or cost per hundredweight per unit time. For private carriage, the optimal policy is of the control-limit type; for common carriage, it may not be.

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  • Corporate Authors:

    Operations Research Society of America

    1314 Guilford Avenue
    Baltimore, MD  United States  21202
  • Authors:
    • Higginson, J K
    • Bookbinder, J H
  • Publication Date: 1995-8

Language

  • English

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Filing Info

  • Accession Number: 00712557
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Oct 10 1995 12:00AM