PRICING DECISIONS BY FREIGHT FORWARDERS

Abstract

As logistics service providers, freight forwarders are intermediary parties who connect shippers to carriers in the logistics chain. This research focuses on assisting a FF with its pricing decision. In the first phase of the research, a game theoretic approach is proposed to investigate how a FF could formulate its optimal pricing decision in face of competition when it has complete information of the entire system. In the second phase of the research, learning mechanisms are proposed to assist a FF to adapt its pricing decisions over time when it has limited information of the entire system. A Multi-Agent System is built to investigate the interaction between the three parties so that the performance of each learning approach can be examined. The third phase of the research aims to help a FF formulate its best pricing decisions based on the information that is accessible to it in the real world operations.