Using game theory to reduce empty container repositioning cost of liner shipping company

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Using game theory to reduce empty container repositioning cost of liner shipping company


Author: Chow, Kar-po
Title: Using game theory to reduce empty container repositioning cost of liner shipping company
Degree: M.Sc.
Year: 2005
Subject: Hong Kong Polytechnic University -- Dissertations
Game theory
Unitized cargo systems
Department: Graduate School of Business
Pages: 55, 1 leaves : ill. (some col.) ; 30 cm.
InnoPac Record:
Abstract: Liner shipping company face a great problem to reduce the empty container repositioning cost due to trade imbalance among Asia & America, Asia & Europe etc. This empty container repositioning problem not only affect the profit margin of the liner company but also the local government (such as Southern California) concern in terms of traffic, number of highways to be built, environrnental pollution , air emission control, land use. In view of the growing trade volume between Asia to America & Asia to Europe, this problem is going to be getting worse in the future. My thesis is to find out the way to reduce the empty container movement in a global sense from the carrier's perspective. Game theory & Linear programming were use as tools to explain the problem as well as to find out the optimal solution of any service such as the one famous "SSX service". Most of the time we call this SSX service transpacific service .This service was run between South East Asia & America. It is one of the typical service run by one of the major Hong Kong Carrier as well as the Grand Alliance members. The main core objective is to optimize each voyage so that minimum number of empty containers are need to reposition back to Asia at each voyage. Cumulative approach was used to find out the best combination so that total profit of 2 voyage is maximum. The whole approach is first we used game theory to compare the existing strategy( used by shipping company) with other strategy. After comparison we found out that there exist other strategy better than existing strategy & valid for one voyage . Then we expand into second voyage. Based on the Branch & Bound method in optimization, we can find out the optimal voyage pattern combinations for 2 voyages. The assumption is that if each service is optimized, then by grouping the three regions, Asia /America, Asia/Europe, America /Europe then the whole carrier's operation is optimized & thence the empty container repositioning will be minimal. Finally if the global operation is optimized, then the number of empty container that need to be transported will be minimized in global sense. Finally profit will be maximized.

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