Transportation pricing of a truckload carrier
Author
Toptal, A.
Bingöl, S. O.
Date
2011Source Title
European Journal of Operational Research
Print ISSN
0377-2217
Electronic ISSN
1872-6860
Publisher
Elsevier
Volume
214
Issue
3
Pages
559 - 567
Language
English
Type
ArticleItem Usage Stats
114
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249
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Abstract
Freight transportation is a major component of logistical operations. Due to the increase in global trade, fierce competition among shippers and raising concerns about energy, companies are putting more emphasis on effective management and usage of transportation services. This paper studies the transportation pricing problem of a truckload carrier in a setting that consists of a retailer, a truckload carrier and a less than truckload carrier. In this setting, the truckload carrier makes his/her pricing decision based on previous knowledge on the less than truckload carrier's price schedule and the retailer's ordering behavior. The retailer then makes a determination of his/her order quantity through an integrated model that explicitly considers the transportation alternatives, and the related costs (i.e., bimodal transportation costs) and capacities. In the paper, the retailer's replenishment problem and the truckload carrier's pricing problem are modeled and solved based on a detailed analysis. Numerical evidence shows that the truckload carrier may increase his/her gainings significantly through better pricing and there is further opportunity of savings if the truckload carrier and the retailer coordinate their decisions.
Keywords
Transportation pricingSupply chain management
Truckload carrier
Less than truckload carrier
Integrated inventory/transportation