Fleet deployment optimization models. Part 1

The problem of minimum-cost operation of a fleet of ships that has to carry a specific amount of cargo between two ports in a given time period for a specific, fixed contract price is studied. Detailed and realistic operating cost functions are developed. Sensitivity analyses are performed to study the effects of small or large changes in one or more cost components on the total costs. A realistic model for the annual transport capacity as a function of speed is also used, in contrast with the linear relation most often used in the literature. The full load and ballast speeds for those ships of the fleet that we operate are selected to minimize the total fleet operating costs including lay-up costs for unused vessels, using nonlinear optimization algorithms.