Revenue Management for Intermodal Transportation: The Role of Dynamic Forecasting
Ting Luo, Long Gao, Yalçın Akçay
Production and Operations Management · 2016 · Volume 25 · Issue 10
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 applications. It advances our understanding onwhenandhowto use dynamic forecasting in intermodal revenue management.
Keywords
revenue management, forecasting, leasing, stochastic comparison, dynamic programming
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