Process graph approach for two-stage decision making: Transportation contracts

Eva Konig, B. Bertók

Research output: Contribution to journalArticle

Abstract

Freight transportation has always been a key factor in industry and market supply and expanding markets relies on its efficacy even more. Uncertainty cannot be avoided in transportation, e.g., traffic or navigability of rivers, and stochastic nature impacts contracts between a firm and a transport company. It is essential to analyze the conditions of contracts, whether they have medium or short term validity, e.g., one costs less while other offers more flexibility. Medium term scenario analysis can be formulated as a two-stage decision problem typically handled by methods applying decision trees. Since realistic problems are complex enough to result in a decision tree of enormous size, application of such methods is practically limited. Our study presents a computer aided algorithmic method based on P-graph framework, which is capable to implicitly involve and enumerate all feasible scenarios instead of explicitly enumerate the possibilities, while keeping the problem formulation compact and visible.

LanguageEnglish
Pages1-11
Number of pages11
JournalComputers and Chemical Engineering
Volume121
DOIs
Publication statusPublished - Feb 2 2019

Fingerprint

Biofuels
Decision trees
Biodiesel
Supply chains
Decision making
Freight transportation
Industry
Rivers
Costs
Uncertainty

Keywords

  • Biodiesel
  • P-graph
  • Stochastic optimization
  • Supply chain
  • Transportation

ASJC Scopus subject areas

  • Chemical Engineering(all)
  • Computer Science Applications

Cite this

Process graph approach for two-stage decision making : Transportation contracts. / Konig, Eva; Bertók, B.

In: Computers and Chemical Engineering, Vol. 121, 02.02.2019, p. 1-11.

Research output: Contribution to journalArticle

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