Abstract
Faced with simultaneous demand and charter cost uncertainty, an industrial shipping company must determine a suitable fleet size, mix, and deployment strategy to satisfy demand. It acquires vessels by time chartering and voyage chartering. Time chartered vessels are acquired for different durations, a decision made before stochastic parameters are known. Voyage charters are procured for a single voyage after uncertain parameters are realized. We introduce the first multi-stage stochastic programming model for the bulk ship fleet renewal problem and solve it in a rolling horizon fashion. Computational results indicate that our approach outperforms traditional methods relying on expected value forecasts.
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