This dissertation presents the development of a dynamic freight assignment model that captures the shipper-carrier interconnections in the freight industry. The shippers minimize their cost by choosing a carrier with the lowest shipping cost for each shipment. The freight market reaches equilibrium when no shipper can reduce its cost further by changing the carrier for any shipment. Each carrier optimizes its operations so that it can reduce its shipping costs and attract more business from the shippers. A variational inequality (VI) formulation is used to model the market equilibrium including the feedback from the carriers to the shippers. The feedback loop provides the shippers an option to change their decisions based on new shipping costs from the carriers. The cost function in the VI is obtained from a carrier sub-model that is a dynamic multi-modal multi-commodity network assignment model based on a Linear programming formulation. An iterative projection algorithm is used to solve the variational inequality. The model is further enhanced by the incorporation of contractual agreements between the shippers and carriers. This is based on the possibility of a carrier being able to offer a lower shipping cost for a shipment in return for a volume commitment from the shipper. A procedure to model the empty truck movements in the transportation network is also developed. The formulations and solution algorithms are presented in this dissertation. Simple shipper-carrier scenarios with an illustrative carrier transportation network is used to implement the solution algorithm to demonstrate the applicability of the model.
展开▼
