A branch and cut algorithm for the container shipping network design problem
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The network design problem in liner shipping is of increasing importance in a strongly competitive market where potential cost reductions can influence market share and profits significantly. In this paper the network design and fleet assignment problems are combined into a mixed integer linear programming model minimizing the overall cost. To better reflect the real-life situation we take into account the cost of transhipment, a heterogeneous fleet, route dependent capacities, and butterfly routes. To the best of our knowledge it is the first time an exact solution method to the problem considers transhipment cost. The problem is solved with branch-and-cut using clover and transhipment inequalities. Computational results are reported for instances with up to 15 ports.
KeywordsLiner shipping Containers Branch and cut Transhipment
The authors wish to thank Brian kallehauge, Christian Edinger Munk Plum, Berit Løfstedt, Shahin Gelareh, Jose Fernando Alvarez, Charlotte Vilhelmsen and two anonymous referees for valuable comments.
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