Network design and fleet allocation model for vessel operation

Abstract

Containership operators in the U.S. are confronted with a number of problems in the way they make critical fleet allocation decisions to meet the increase of shippers' demands. Instead of the empirical approach, this research describes an optimization method for the fleet allocation problem This methodology is applied by generating hypothetical values for a hypothetical firm. The endeavor of this method is to facilitate ship operations by allocating available fleet to maximize capacity and covering all the demands with the lowest cost The problem solving process is subdivided into three sub-models: the string simulation sub-model, the network design sub-model, and the fleet and cargo assignment sub-model. Each sub-model is explored by the combined approach of analysis and simulation, formulated as a Mixed Integer linear programming problem, implemented using the Optimization Programming language, and solved by CPLEX. This model provides several feasible fleet allocation proposals ranked by their profits, as well as yields the output of the detail cargo assignment at each port, the revenue, cost, and profit breakdown for each proposal.

(cont.) Subsequently, various scenarios can be studied in great detail by developing a User Interface in Java programming language based on a determined proposal. This interface allows the carrier to evaluate hundreds or thousands of fleet allocation scenarios and to quickly focus on key characteristics and options that are most relevant. This program extends the deterministic optimization method into a model supporting the solution to stochastic problems.