This paper shows how to coordinate the decisions on pricing and fleet management of a freight carrier. We consider a setting where the carrier announces its prices at the beginning of a certain time horizon and the load arrivals over this horizon depend on the announced prices. Assuming that the vehicle fleet is managed according to a particular class of fleet management models, we present a tractable method to obtain sample path-based directional derivatives of the objective function with respect to the prices. We use this information to search for a good set of prices. Numerical experiments show that our approach yields high-quality solutions.
|Original language||English (US)|
|Number of pages||21|
|State||Published - Aug 2007|
All Science Journal Classification (ASJC) codes
- Civil and Structural Engineering
- Dynamic fleet management
- Dynamic programming