Journal article
Revenue Management for Intermodal Transportation: The Role of Dynamic Forecasting
T Luo, L Gao, Y Akçay
Production and Operations Management | WILEY | Published : 2016
DOI: 10.1111/poms.12553
Abstract
We study a joint capacity leasing and demand acceptance problem in intermodal transportation. The model features multiple sources of evolving supply and demand, and endogenizes the interplay of three levers—forecasting, leasing, and demand acceptance. We characterize the optimal policy, and show how dynamic forecasting coordinates leasing and acceptance. We find (i) the value of dynamic forecasting depends critically on scarcity, stochasticity, and volatility; (ii) traditional mean-value equivalence approach performs poorly in volatile intermodal context; (iii) mean-value-based forecast may outperform stationary distribution-based forecast. Our work enriches revenue management models and app..
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Funding Acknowledgements
We thank the department editor Bill Cooper, senior editor and three referees for their constructive suggestions that significantly improved this study. Long Gao's research was supported by UCR Regents' Faculty Fellowships. We have also benefited from the discussions with Elodie Adida, Volodymyr Babich, Fernando Bernstein, Metin Cakanyildirim, Felipe Caro, Charles Corbett, Milind Dawande, Yichuan Ding, Lingxiu Dong, Mohsen El Hafsi, Stephen M. Gilbert, Daniel Granot, Frieda Granot, Mike Gorman, Mehmet Gumus, Dorothee Honhon, Ganesh Janakiraman, Elena Katok, Alp Muharremoglu, Mahesh Nagarajan, Adem Orsdemir, Ozalp Ozer, Anyan Qi, Ying Rong, Sergei Savin, Suresh Sethi, Junmin Shi, Jeannette Song, Greys Sosic, Terry Taylor, Brian Tomlin, Francis de Vericourt, Shouqiang Wang, Yunzeng Wang, Jian Yang, Nan Yang, Shengqi Ye, Dan Zhang, and Renyu Zhang. All remaining errors are our own.