Capacity allocation policy of third party warehousing with dynamic optimization

Authors:
Chang Lin
Affiliations:
School of Transportation Engineering, Tongji University, Shanghai, China
Venue:
ISICA'10 Proceedings of the 5th international conference on Advances in computation and intelligence
Year:
2010

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Abstract

Dynamic booking control is a hard problem in warehousing capacity allocation. With the similar method to solve stochastic knapsack problems, a dynamic and stochastic programming model is established in this paper. The dynamic booking control policies are put forward based on threshold value and the analysis of the characteristic of the model. Finally, optimization warehousing allocation policy is achieved by digital simulation. This shows that expecting revenue is concave function of surplus capacity, and also concave function of booking leading time, while the opportunity cost is a non-increase function of surplus capacity, and also a non-increase function of booking leading time. These policies provide scientific foundation for real-time decision-makers of 3PW companies.