A Note on Air‐Cargo Capacity Contracts

Amaruchkul, Kannapha; Cooper, William L.; Gupta, Diwakar

doi:10.1111/j.1937-5956.2010.01158.x

Cited by 38 publications

(13 citation statements)

References 21 publications

(28 reference statements)

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“…They show that if the savings from inventory holding and shortage costs because of information sharing are sufficiently high, then a side payment contract that induces Pareto-optimal and information sharing is feasible in the make-to-stock scenario. Especially, Amaruchkul [ 41 ] focus on the capacity contract between a carrier and a forwarder in air-cargo supply chain when certain parameters such as the forwarder’s demand, operating cost to the carrier, margin, and reservation profit are forwarder’s private information. They propose contracts in which the forwarder pays a lump sum in exchange for a guaranteed capacity allotment and receives a refund for each unit of unused capacity according to a pre-announced refund rate.…”

Section: Literature Reviewmentioning

confidence: 99%

Express delivery logistics with high-speed railway: a perspective of payment scheme and forecast information sharing

Huawei

Zheng

et al. 2021

Complex Intell. Syst.

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This paper investigates the payment scheme and forecast information sharing issues in the express delivery logistics with the high-speed railway. The HSR carriers need to coordinate the transportation capacity between passenger and freight. It is widely recognized that the advance payment scheme (APS) using as deposit is a beneficial way for the HSR carriers to make decisions on the transportation capacity preserved for express delivery. However, the express service providers, who possess private forecast information of express delivery demand, may share inaccurate information with the HSR carriers to acquire sufficient preserved transportation capacity. This paper discusses what payment scheme is preferred by the HSR carrier, the express service provider through discussing the deposit decisions with or without forecast information sharing. We show that sharing demand forecast information can reduce the prereserved capacity and increase the profits of the HSR carrier. With the delayed payment scheme (DPS), the express service provider has no motivation to share the information; while with the APS, the HSR carrier can reasonably choose the deposit to encourage the express service provider to share the demand information. Our analysis also shows that the HSR carrier’s profits with the APS is restricted by the investment returns and the express service provider’s information sharing decisions. We also analyze the value range of the deposit, which is a proportion of the overall payment, that allows both the HSR carrier and the express service provider to prefer the APS, as well as to encourage the express service provider to share the demand information.

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Section: Literature Reviewmentioning

confidence: 99%

Express delivery logistics with high-speed railway: a perspective of payment scheme and forecast information sharing

Huawei

Zheng

et al. 2021

Complex Intell. Syst.

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“…Most studies consider accept-reject decisions or overbooking for single flights. Only a few consider capacity allocations, such as Amaruchkul et al (2011). They consider allotments, i.e.…”

Section: Revenue Management In Freight Transportationmentioning

confidence: 99%

Revenue management with two fare classes in synchromodal container transportation

et al. 2020

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The cargo fare class mix (CFCM) problem aims to find the optimal fare class mix for a given intermodal transportation network based on known client demands. It is based on a revenue management problem for aviation passengers, the fare class mix problem, but considering intermodal cargo transportation, two major differences apply. Firstly, the CFCM’s premise is that long-term commitments to customers must be provided, such that a customer has a guaranteed daily capacity. Secondly, cargo may be rescheduled or rerouted, as long as the customer’s delivery due date is met. Our goal is to balance revenue maximisation and capacity utilisation by optimally combining two delivery service levels. Therefore, the optimisation problem is to select fare class limits at a tactical level up to which transportation demand will be accepted on a daily basis at the operational level. Any accepted demand that does not fit on the available network capacity during operation, must be transported by truck at increased expenses for the network operator. In this paper, we propose a faster method than the previously proposed solution method for a single corridor network and we provide proofs for the optimality of the result. Using this, we extend the problem to an intermodal network of multiple corridors. We provide numerical results for different settings, in which we compare the baseline of individual corridor optimums with the result of using rerouting. Finally, we apply the methods in a case study for an intermodal transportation network in North-West Europe.

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“…Hellermann (2006) studies a capacity contract with a reservation price and an execution price like ours. Amaruchkul et al (2011) extend the above models by examining how much information rent has to be paid to a forwarder who possesses private information.…”

Section: Literature Reviewmentioning

confidence: 99%

Supplier Competition with Option Contracts for Discrete Blocks of Capacity

Anderson

Chen

Shao

2017

Operations Research

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Abstract. When a firm faces an uncertain demand, it is common to procure supply using some type of option in addition to spot purchases. A typical version of this problem involves capacity being purchased in advance, with a separate payment made that applies only to the part of the capacity that is needed. We consider a discrete version of this problem in which competing suppliers choose a reservation price and an execution price for blocks of capacity, and the buyer, facing known distributions of demand and spot price, needs to decide which blocks to reserve. We show how to solve the buyer's (combinatorial) problem efficiently and also show that suppliers can do no better than offer blocks at execution prices that match their costs, making profits only from the reservation part of their bids. Finally we show that in an equilibrium the buyer selects the welfare maximizing set of blocks.

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A Note on Air‐Cargo Capacity Contracts

Cited by 38 publications

References 21 publications

Express delivery logistics with high-speed railway: a perspective of payment scheme and forecast information sharing

Express delivery logistics with high-speed railway: a perspective of payment scheme and forecast information sharing

Revenue management with two fare classes in synchromodal container transportation

Supplier Competition with Option Contracts for Discrete Blocks of Capacity

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