Enhancing operational efficiency of a container operator: A simulation optimization approach

Abstract

One of the key issues in a typical marine logistics industry dealing with container operations is to maximize profitability subject to pre-specified service level compliance(s) under uncertain and complex business environment. The problem becomes more complex in presence of heterogeneous customers, varied degree of demand priority, supply restrictions, and other allied operational constraints. In this paper, a typical container business operation has been considered where the service provider deals with different types of customers. The problem has been modeled with discrete-event simulation techniques. A simulation optimization technique has been deployed to analyze several opportunities to improve overall system performance in terms of increased profit, demand fulfillment rate, and deriving other contractual parameter(s) under varied scenarios. Trade-offs between different KPIs including fleet size, unmet demand, service level, and utilization have been analyzed and a sensitivity analysis has been provided to bring in several managerial insights.