CHANCE CONSTRAINED MODELS FOR TRANSPORT PRICING AND SCHEDULING UNDER COMPETITION

A MODEL IS DEVELOPED FOR PLANNING SHIPPING PRICES OVER VARIOUS ROUTES OF A TRANSPORTATION NETWORK. IT IS ASSUMED THAT OVER EACH ROUTE A "RAILROAD" ( OR OTHER TRANSPORT FIRM) COMPETES DIRECTLY WITH ONE OTHER SHIPPING FIRM (E.G., ANOTHER RAILROAD, A TRUCKER) FOR THE VOLUME OF BUSINESS. THE POSSIBILITY THAT THE RAILROAD'S COMPETITION WILL COME FROM DIFFERENT FIRMS OVER DIFFERENT ROUTES IS ALLOWED. THE MODEL CONSIDERED IS A MULTI-ROUTE PROBLEM WHICH INVOLVES BOTH INSTITUTIONAL AND PHYSICAL OPERATING CONSTRAINTS. EACH FIRM'S DEMAND DEPENDS LINEARLY UPON ITS OWN AND ITS OPPONENT'S PRICE. SINCE EACH COMPETING FIRM SETS ITS PRICE POLICY INDEPENDENTLY AND BEFORE THE VARIABLE DEMAND IS KNOWN, SOME OF THESE CONSTRAINTS CANNOT BE GUARANTEED TO HOLD WITH CERTAINTY. THUS THEY ARE BEST EXPRESSED AS CHANCE CONSTRAINTS. THE OBJECTIVE OF THE "RAILROAD" IS TO MAXIMIZE ITS PROFIT SUBJECT TO THE CONSTRAINTS OF THE MODEL. THE SOLUTION OF THE MODEL SYNTHESIZES A PRICING POLICY FOR THE "RAILROAD". ALSO VARIATIONS OF THE MODEL CAN BE EMPLOYED IN A SENSITIVITY ANALYSIS OF THE SUGGESTED POLICY. THE RELATIONSHIP BETWEEN THE MODEL AND OTHER NOTIONS IN GAME THEORY AND CHANCE-CONSTRAINED GAMES IS DISCUSSED. AN EXAMPLE IS OUTLINED, AND THE IMPLICATIONS FOR A WELFARE- ECONOMIC PRICING POLICY CONSIDERED. /AUTHOR/

  • Availability:
  • Supplemental Notes:
    • Vol 2, pp 57-76
  • Corporate Authors:

    Northwestern University, Evanston

    Department of Civil Engineering, 600 Foster Street
    Evanston, IL  United States  60208
  • Authors:
    • Charnes, A
    • Kirby, M J
    • Littlechild, S C
    • Raike, W M
  • Publication Date: 1968-2

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00201759
  • Record Type: Publication
  • Source Agency: Traffic Systems Reviews & Abstracts
  • Files: TRIS
  • Created Date: May 13 1970 12:00AM