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Bunker procurement planning for container liner shipping companies: Multistage stochastic programming approach
journal contribution
posted on 2023-05-19, 00:30 authored by Meng, Q, Wang, Y, Yuquan DuThis paper investigates the bunker procurement planning (BPP) problem arising for a container liner shipping company that plans to purchase bunker from both bunker futures contracts and the spot market to hedge the risk in fluctuation of and increases in bunker prices. A multistage bunker procurement decision process for the BPP problem is developed to determine the monthly bunker procurement. The process allows the shipping company to sign bunker futures contracts in the first stage and to rebalance them in the subsequent stages. By assuming the stochasticity of bunker spot price, the BPP problem is formulated as a mean-variance minimization stochastic programming model. An approximation solution method for solving this model is designed by integrating random variable sampling technique, scenario tree generation, and quadratic programming approximation. Finally, numerical experiments demonstrate that bunker procurement risk can be effectively hedged with the proposed method. This study provides a useful decision tool for container liner shipping companies to use when planning bunker procurement.
History
Publication title
Transportation Research RecordVolume
2479Pagination
60-68ISSN
0361-1981Department/School
Australian Maritime CollegePublisher
Transportation Research Board, U.S. National Research CouncilPlace of publication
USARights statement
Copyright 2015 Transport Research BoardRepository Status
- Restricted