Optimization of Market Behavior of a Transportation Company

Abstract

The relevance of optimizing the interaction of participants in manufacture and transport systems is due to the growth of the scale of social production, the development of transnational companies and international trade at the present stage of market transformations, economic integration and development of transport corridors. In this paper we will optimize the market behavior of a transport enterprise in the manufacture and transportation chain. Objectives: To determine the best option for coordinating the actions of participants in the manufacture and transport chain and to optimize the mechanism for granting discounts on the tariff of the transport company. Research methods: economic and mathematical modeling, construction and mathematical analysis of models of manufacture and transport systems, optimization computer calculations, economic interpretation of the results. In this paper it will also be analyzed how full or partial integration of the participants of manufacture and transportation chains, such as coordination of actions, unification of interests can ensure not only a significant increase in the profits of each participant, but also an increase in production volumes and delivery of products to consumers with a corresponding decrease in prices. The paper also portrays how every participant in the manufacture and transportation chain can paradoxically benefit from the established mechanism that would provide discounts on the tariff of a transport company depending on the volume of cargo flow followed by principle the more cargo, the greater the discount. It will be shown how manufacturer benefits by reducing transportation costs, while the transport company earns less per container, but the outstripping growth in the number of these containers provides it with a higher profit. Consequently, the conditions for the feasibility of applying such a mechanism of tariff discounts will also be established.