SENSITIVITY ANALYSIS OF DYNAMIC NETWORKS: AN APPLICATION TO PRICING AND LOAD EVALUATION FOR TRUCKLOAD MOTOR CARRIERS

Estimating the reduced cost of an upper bound in a classical linear transshipment network is traditionally accomplished using the shadow price for this constraint given a standard calculation. This reduced cost is only a subgradient due to network degeneracy and often exhibits errors of 50 percent or more compared to the actual change in the objective function if the upper bound were raised by one unit and the network reoptimized. A new approximation is developed, using a simple modification of the original reduced cost calculation, which is shown to be significantly more accurate. The paper summarizes the basic theory behind network sensitivity, much of which is known as folklore in the networks community, to establish the theoretical properties of the new approximation. The essential idea is to use least-cost flow augmenting paths in the basis to estimate certain directional derivatives which are used in the development of the approximation. (A)

  • Corporate Authors:

    CENTRE DE RECHERCHE SUR LES TRANSPORTS. UNIVERSITE DE MONTREAL

    C.P. 6128, SUCCURSALE A
    MONTREAL, QUEBEC  Canada  H3C 3J7
  • Authors:
    • Powell, W B
    • CAPE, D J
  • Publication Date: 1988

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00674503
  • Record Type: Publication
  • Source Agency: Transportation Association of Canada (TAC)
  • Files: ITRD
  • Created Date: Mar 8 1995 12:00AM