Case Studies

Some researchers have attempted to model the components of a real case and apply the models in order to achieve proper solutions. It would be difficult to account for all the parameters dealing with a problem, but the researchers have done their best to approximate reality while making models. The more realistic the model, the more it can achieve.

Case: A Pricing Mechanism for Determining the Transportation Rates

Farahani et al. [70] developed a systematic method for calculating the transporta­tion rates for tanker trucks of the National Iran Oil Product Distribution Co. (NIOPDC). The objective of the research was to design a computer-based system for calculating transportation rates and estimating the required budget. Determining appropriate transportation rates is critical, because of the cost of transporting oil Products.

The researchers first reviewed and classified studies that determined transporta­tion rates. Afterward, the current supply chain of oil products was described, and

Table 21.3 A Classification of Energy/Hazmats Transportation Model

Road Railway Marine Deterministic Stochastic Single Multiple Local Routing Global Models Models Objective Objective Models Routing

Models

Akgiin et al. |30] Batta and Chiu [31J Bowler and Mahmassani [32]

Chang et al. [33] Corea and Kulkarni [34] Carotenuto et al. [35] Darzentas and Spyrou [36]

Dell'Olmo et al. [37] Erkut and Ingolfsson [38] Erkut and Ingolfsson [39) Erkut and Vecter [27] Fagerholt and Rygh [40] Frank [41] Fu and Rilett [42] Glickman [43] Glickman [44] Gopalan and Kolluri [45] Haas and Kichner [46] Hall [47]

lakovou et al. [48] lakovou [49] Kara et al. 150] Kulkarni 151 \

Lindner-Dutton et al. [52] Murianov and RcVelle

[53J

Miller-Hooks [54J Miller-Hooks and

Mahmassani [55] Mirchandani [56] ReVelle et al. [57J Richetta and Larson |58[ Sherali et al. [59] Turnquist [60] Verma and Verter [61J Weigkricht and Fedra [62]

Wijeratne et al. 163] Zografos and

Androutsopoulos [64]

then the process used for calculating the transportation rates for the company was explained. In the remainder come the purpose, input and output of the case, which is accompanied by the introduction of the new developed system and the techni­ques used to calculate the transportation rates. The work contains an example to approve the model, the necessary data, and the final results.

There have been two generic approaches for transportation rates determination- one of them is based on learning from previous patterns and behaviors, and the other is based upon total transportation cost. The researchers have used the second approach because it estimates the total transportation cost while taking into account time value of money. The designed technique to determine transportation rates is a combination of two methods; time value of money methods and engineering eco­nomics methods.

To estimate the next year s transportation budget, information from previous years is used because the monthly depot-to-depot transportation is estimated only for the next month. The budget is divided into two parts that are calculated sepa­rately. It consists of the procurement transportation (depot-to-depot transportation) budget and the depot-to-retailer transportation budget.

The system that supports the models of rate calculation and estimation of trans­portation budget includes three parts. A central database collects and saves the information related to rate calculation and budget estimation. The main part is the processing system based on the models of determining liquid gas transportation rates, oil product transportation rates, and estimating transportation budget.

To compare the designed models with the previous ones, calculated rates are compared with current rates in the company. Also, a sensitivity analysis is carried out of main input parameters. In addition to that, the paper assesses the results of chosen routes and their rates. The sample routes are a combination of intercity and inner-city routes, including depot-to-depot and depot-to-retailer cases.

The results indicate the estimation of costs for freight transportation, loading, and unloading. The software developed in the paper estimates transportation rates and the final required budget based on the database.