A network option portfolio management framework for adaptive transportation planning

A real option portfolio management framework is proposed to make use of an adaptive network design problem developed using stochastic dynamic programming methodologies. The framework is extended from Smit’s and Trigeorgis’ option portfolio framework to incorporate network synergies. The adaptive planning framework is defined and tested on a case study with time series origin-destination demand data. Historically, OD time series data is costly to obtain, and there has not been much need for it because most transportation models use a single time-invariant estimate based on deterministic forecasting of demand. Despite the high cost and institutional barriers of obtaining abundant OD time series data, we illustrate how having higher fidelity data along with an adaptive planning framework can result in a number of improved management strategies. An insertion heuristic is adopted to run the lower bound adaptive network design problem for a coarse Iran network with 834 nodes, 1121 links, and 10 years of time series data for 71,795 OD pairs.     

Trucking industry demand for urban shared use freight terminals

The issue of shared use urban freight facilities first received attention during the 1970s when it was observed that, while inter-urban freight movements were becoming increasingly efficient, there were significant diseconomies in the movement of freight via truck within urban areas. Early research suggested that shared urban freight facilities should be constructed so that trucking companies could consolidate smaller shipments into larger ones. In the past few years, the concept of Urban Ports has gained increasing attention, not just for carriers who need to load and unload freight, but to provide a place near the urban center for truckers to wait out peak traffic periods. In this paper, using recently developed survey data, we examine trucking company interest in such facilities by examining the results of an ordered probit demand model.     

State-of-the art of freight forecast modeling: lessons learned and the road ahead

In this paper we review freight forecasting models and current advances and needs with respect to data and model development. We then present a case study to suggest which models should be developed for the State of California in the US. We suggest several alternatives including an aggregate commodity flow model, a disaggregate regional logistics model and a hybrid regional logistics model with a truck touring model. We point out however, that the data requirements for the latter model would be extensive. In addition, the development of hybrid models, for example progress in the integration of regional logistics models with urban truck touring models, will introduce new problems such as reconciling the outputs of multiple models for consistency.     

Use of ecological footprinting to explore alternative transport policy scenarios in an Irish city-region

The objective of this paper is to compare the ecological footprint for travel-commuting patterns for the residents of an Irish city-region, that is Limerick city-region, in 1996 and 2002. Scenario building, based on ecological footprint analysis, is used to estimate the impact of different policy choices for 2010. The optimal policy mix for sustainable travel is proposed and consists of a mix of reduced demand through travel demand measures, better spatial planning and technological improvements in fuel economy.     

Approximation algorithms for the bid construction problem in combinatorial auctions for the procurement of freight transportation contracts

Trucking companies (carriers) are increasingly facing combinatorial auctions conducted by shippers seeking contracts for their transportation needs. The bid valuation and construction problem for carriers facing these combinatorial auctions is very difficult and involves the computation of a number of NP-hard sub problems. In this paper we examine computationally tractable approximation methods for estimating these values and constructing bids. The benefit of our approximation method is that it provides a way for carriers to discover their true costs and construct optimal or near optimal bids by solving a single NP-hard problem. This represents a significant improvement in computational efficiency. We examine our method both analytically and empirically using a simulation based analysis.     

A multi-criteria decision support methodology for implementing truck operation strategies

This study proposes a multi-criteria decision support methodology to enable the prioritization of potential alternative transportation system operations strategies and then demonstrates the effectiveness of the methodology using a case study involving truck operations. The primary feature of this methodology is its ability to help policymakers consider economic, public, and private sector standpoints simultaneously. The economic criterion is cost to the public sector where four criteria related to truck impacts on the transportation system are incorporated. These are traffic congestion, safety hazards, air pollution, and pavement damage. In addition, reliability and productivity are regarded as metrics representing the private sector viewpoint since they can significantly affect profitability. The methodology combines qualitative and quantitative aspects of these standpoints. In order to demonstrate the applicability of this methodology, a corridor with some of the highest truck traffic in the US is selected as a case study and three forms of left lane restrictions for trucks are considered. For qualitative analysis, survey data were collected from two groups classified as public agency and transportation industry professionals who are experts in trucking. In addition, a micro traffic simulation model was used to produce various performance measurements that can describe quantitative impacts. As a result, the methodology provides a rational argument for prioritizing potential alternative truck strategies.     

Network-based real option models

Building on earlier work to incorporate real option methodologies into network modeling, two models are proposed. The first is the network option design problem, which maximizes the expanded net present value of a network investment as a function of network design variables with the option to defer the committed design investment. The problem is shown to be a generalized version of the network design problem and the multi-period network design problem. A heuristic based on radial basis functions is used to solve the problem for continuous link expansion with congestion effects. The second model is a link investment deferral option set, which decomposes the network investment deferral option into individual, interacting link or project investments. This model is a project selection problem under uncertainty, where each link or project can be deferred such that the expanded net present value is maximized. The option is defined in such a way that a lower bound can be solved using an exact method based on multi-option least squares Monte Carlo simulation. Numerical tests are conducted with the classical Sioux Falls network and compared to earlier published results.