This paper studies container fleet management for an oil supplier. The demand and spot freight rate are random. The supplier must adjust charter contracts and options to manage capacity shortage. The objective is to minimize weighted, conditional value-at-risk.
The authors formulate the problem as a nonlinear program. To simplify the computation, they use simulation to generate scenarios for linearizing the nonlinear program. They also calibrate the model with real data and numerically show that properly chosen portfolio of contracts and options can reduce risks.
I applaud the authors’ effort to tackle a realistic operational problem with well-known methods. But that alone is insufficient for publication. Unless I misread, the paper makes neither theoretical nor managerial contributions, in any significant sense.
Indeed, as its literature review session shows (the journals researchers barely read), the paper is targeting a wrong audience. Perhaps application oriented journals are more appropriate outlets.
[Antelope Canyon, 8/07/2009]