examine shows cost of dynamic forecasting in intermodal control

Ting Luo, a PhD candidate in operations control in the Naveen Jindal faculty of management, lately tested how managers in intermodal advertising corporations have to use dynamic forecasting to coordinate daily operations, decorate performance and enhance profitability.

posted on line in might also in manufacturing and Operations control, the observe decided the surest field leasing and load attractiveness policy underneath dynamic call for and supply forecasting. It also observed that the value of dynamic forecasting depends on shortage, stochasticity, or randomness, and volatility.

Luo stated intermodal revenue management isn't the same as conventional revenue control models, which do no longer deal with the supply issue.

With airlines or lodges, no potential remains whilst the distance is complete, Luo said. In intermodal, ability may be extended through leasing boxes from local railways. There also is a random supply of repositioned and lower back boxes.

"We need to first decide what number of boxes to borrow. The change-off is between on-spot leasing value and capability profit created by way of the borrowed container," Luo said. "Then we decide, 'Do i use this container to satisfy the modern-day call for, or do I just hold it for day after today?' perhaps the following day, i've more profitable orders coming in, so I reserve that container. Or, if nowadays i've a whole lot of very profitable orders, i'm able to backlog that order and satisfy it day after today while i've greater packing containers."

maximum corporations don't have any formalized short-time period forecast and handiest a vague idea of to be had container potential, Luo stated. Few have systematic leasing and reputation rules.

"The conventional mean-fee forecasting can also produce misleading hints because it ignores the stochasticity within a duration and volatility among periods," she said. "both of these capabilities are captured through dynamic forecasting."

The study characterized the consequences of dynamic forecasting on profitability and coverage choice. on the subject of profitability, dynamic forecasting reduces the need for carrying massive stockpiles for an extended time, thereby saving on retaining expenses. It also ensures rapid stock buildups for approaching shortages. With policy choice, dynamic forecasting guides policy formula.

Luo and her co-authors also decided that dynamic forecasting need to be used whilst client heterogeneity is high, inventory costs are low, ability supply is slight and forecast accuracy is high.

"The Dallas-citadel well worth region is one of the kingdom's essential transportation hubs and domestic to many railways and intermodal businesses," Luo said. "Our version not best gives these firms practical operational equipment however additionally specifies how and whilst to apply dynamic forecasting."

Dr. lengthy Gao of the university of California, Riverside and Yalcin Akcay of Koc university in Istanbul are co-authors on the paper.

The trio's destiny research will attention on coordinating the decentralized intermodal community that includes a couple of locations.