A heuristic to solve a sea cargo revenue management problem

Abstract

In this paper, we will introduce a heuristic to solve a single leg revenue management problem with postponement, arising from the sea cargo industry. Based on previous work, it was shown that the optimal policy to allocate the capacity of the ship is a threshold policy. Based on the sample average approximation method, we formulate a mixed integer linear programming problem to determine the stationary threshold policy. A heuristic (known as the perturbation approach) is proposed to solve the problem. From the numerical result, it is shown that our approach performs better than some of the methods used to solve the mixed-integer programming problem. © Springer-Verlag 2007.