Previous works have applied the operations research techniques to the intermodal network design and expansion problems. The current research has included the follow ing considerations from the real-world for modeling of the intermodal network expansion problems.
1) competition of intermodal service providers (to maximize profit);
2) uncertainty in demand and supply (to minimize total cost) with robust optimization; 3) multi-period time frames for construction decisions. (to minimize total cost)
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This dissertation also developed a number of meta-heuristic algorithms to solve the larger- size examples of these models. These contributions are addressed in the following research papers.
2.6.1 INTERMODAL NETWORK EXPANSION IN A COMPETITIVE ENVIRONMENT WITH UNCERTAIN DEMANDS
Contributions of this study to the literature are: by 1) a new mathematical model for intermodal network expansion, 2) incorporating competition between intermodal service providers, 3) including demand uncertainty in expansion decision, 4) developing a new SA algorithm to solve this model which could significantly reduce computational time compared to general optimization solvers, 5) studing practical aspects of the model using a real world case study to investigate model’s real world application.
2.6.2 RELIABLE INTERMODAL FREIGHT NETWORK EXPANSION WITH DEMAND UNCERTAINITIES AND NETWORK DISRUPTIONS
This work contributed to the literature by: 1) a new integrated model for intermoda l network expansion considering addition of new terminals, expanding existing termina ls and retrofitting higher risk links of the network with a limited budget, 2) considering demand and supply uncertainties, 3) developing GA for strategic decisions with a new chromosome representation, 4) developing a new intermodal routing algorithm for freight flow assignment, 5) bringing practical aspects of the model by using a real world intermodal network and presenting managerial insights for intermodal service providers. The results verified that this model can significantly reduce future costs for the network planer if any disruption happens in the network.
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2.6.3 RELIABLE MULTI-PERIOD INTERMODAL FREIGHT NETWORK EXPANSION PROBLEM
The last work in this dissertation improves the previous model by considering the follow ing contributions: 1) considering multiple periods for expansion decisions, 2) assuming shorter periods for routing decisions, 3) proposing a new SA algorithm to solve the mathemat ica l model proposed for this problem ,4) studying different practical aspects of the proposed model by using a real size case study and 5) proving the efficiency of multi-period decision making in total network costs and resource utilization compared to the existing models in the literature
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CHAPTER 3: INTERMODAL NETWORK EXPANSION IN A
COMPETITIVE ENVIRONMENT WITH UNCERTAIN DEMAND
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1Fotuhi F., N. Huynh. International Journal of Industrial Engineering and Computations. Vol. 6, no. 2, 2015, pp. 285–304. Reprinted here with permission of publisher.
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This paper formulated robust optimization models for the problem of finding near-optima l locations for new intermodal terminals and their capacities for a railroad company, which operates an intermodal network in a competitive environment with uncertain demands. To solve the robust models, a SA algorithm was developed. Experimental results indicated that the SA solutions (i.e. objective function values) are comparable to those obtained using GAMS, but the SA algorithm can obtain solutions faster and can solve much larger problems. Also, the results verified that solutions obtained from the robust models are more effective in dealing with uncertain demand scenarios.
3.1 INTRODUCTION
Intermodal freight transport is the movement of goods in one and the same loading unit or road vehicle, which uses successively two or more modes of transport without handling the goods themselves in changing modes (United Nations, 2001). This research deals with the locations of rail-highway intermodal terminals where the modal shift occurs. A significa nt portion of the total cost and time in intermodal services is attributed to the drayage movements and intermodal terminal operations. Thus, the location of an intermoda l terminal plays an important role in improving efficiency and attractiveness of intermoda l services (Sorensen, Vanovermeire and Busschaert, 2012).
Most of the intermodal terminal location studies in the literature solve for the optimal locations without considering existing terminals in the network. This assumption is not realistic in practice as pointed out by Gelareh, Nickel and Pisinger (2010). In today’
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competitive environment, railroad companies are constantly looking to expand their intermodal networks to meet customers’ demands and to increase market share. This is often accomplished by incrementally adding a few new terminals at a time. Solving the location problem that takes into account a company’s existing terminals as well as those of competitors is more challenging. This study seeks to fill this gap in existing literature by developing a mathematical model that addresses competition in intermodal termina l location decisions. Competition involves new incoming terminals competing against existing terminals in the network for market share.
There are a few additional challenges involved in developing the proposed model. The first is uncertainty in demand. Demand for an intermodal terminal is the result of the commodity flow originated or terminated in the region where the terminal is located (Chiranjivi, 2008). Accurate long-range prediction of commodity flow is difficult because of uncertainty in economic situations and changes in supply chain decisions, infrastruct ure, and regulations. For example, most freight-related forecasts failed to predict the global recession that started in 2009. Thus, it is crucial for a strategic model to explicitly account for uncertainty in demand. The second challenge is determining the appropriate throughp ut capacity for the new terminal to avoid the situation of under-equipping the terminal which would lead to delays at the terminal (Nocera, 2009) or over-equipping the terminal which would lead to underutilized staff and resources. Throughput capacity is the total number of containers that can be processed by a terminal in a year and is usually expressed in TEUs (Twenty-foot Equivalent Units) (Bassan, 2007).
The objective of this work is to develop a mathematical optimization model which addresses all of the challenges and issues mentioned above. Specifically, the model seeks
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to determine the locations for the new intermodal terminals and their throughput capacities while considering competition and uncertainty in freight demands. The developed model contributes to the existing body of work on intermodal terminal location by explicit ly incorporating competition and uncertainty in freight demand in the formulation. The proposed model is applicable for intermodal networks where private rail carriers are responsible for their own maintenance and improvement projects; the U.S. intermoda l networks operate under this model.