Optimal liner fleet routeing strategies

The objective of this paper is to suggest practical optimization models for routing strategies for liner fleets. Many useful routing and scheduling problems have been studied in the transportation literature. As for ship scheduling or routing problems, relatively less effort has been devoted, in spite of the fact that sea transportation involves large capital and operating costs. This paper suggests two optimization models that can be useful to liner shipping companies. One is a linear programming model of profit maximization, which provides an optimal routing mix for each ship available and optimal service frequencies for each candidate route. The other model is a mixed integer programming model with binary variables which not only provides optimal routing mixes and service frequencies but also best capital investment alternatives to expand fleet capacity. This model is a cost minimization model.