The implication of the stochastic gross-profit-per-day objective on the cargo ship profitability, capacity, and speed

Abstract

Purpose This paper aims to study the implication of the stochastic gross-profit-per-day objective on the ship profitability and the ship capacity and speed. Design/methodology/approach The paper has used the mathematical model and the solution methodology given by El Noshokaty, 2013, 2014, 2017a, 2017b, and SOS, 2019. Findings The paper finds that if the ship owner follows the rate concept and the cargo demand forecast, he can improve the profitability of his company and be able to select the proper capacities and speeds for the ships used. Research limitations/implications The findings are not only useful for the shipping or other cargo transport companies but also for businesses like gas reservoir development, car assembly lines in the industry, cooperative farming and crop harvesting in agriculture, port cargo handling in trade and road paving in construction. Originality/value The contribution of this paper lies in notifying the ship owners of the possible profitability improvement and the consequences of building ships of larger capacities and slower speeds.