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1213. Optimal multi-period policy for empty container transferring between two ports under uncertainty

Invited abstract in session TD-62: Sustainable freight transportation, stream OR in Port Operations.

Tuesday, 14:30-16:00
Room: S12 (building: 101)

Authors (first author is the speaker)

1. Dongping Song
School of Management, University of Liverpool

Abstract

In container shipping, ports often face uncertain demand and supply of empty containers over time. Effectively and efficiently managing empty containers between ports in multiple time periods is challenging. In this paper, we consider two neighbouring ports that are facing independent and uncertain supply and demand of empty containers from shippers. We seek the optimal empty container transfer policy between two ports over a multi-period planning horizon to minimize the total expected cost, consisting of empty container transferring costs between two ports, inventory holding costs, and container leasing costs at both depots. The problem is formulated as a stochastic dynamic programming model. The local properties of the value function, such as the first and second derivatives on a region-wise basis, are analysed. The region-wise properties of the value function enable us to establish the structural characteristics of the optimal empty container transfer policy over multiple time periods. Specifically, the entire state space is divided into three control regions by two monotonic switching curves. The asymptotic behaviours of the switching curves are analysed analytically. The structural properties of the optimal policy and the asymptotic behaviours of the switching curves are then used to construct simple near-optimal and easy-to-operate policies. Numerical examples are provided to demonstrate the analytical results.

Keywords

Status: accepted

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