Integrated operations planning and revenue management for rail freight transportation

In the rail industry, profit maximization relies heavily on the integration of logistics activities with an improved management of revenues. The operational policies chosen by the carrier have an important impact on the network yield and thus on global profitability. This paper bridges the gap between railroad operations planning and revenue management. We propose a new bilevel mathematical formulation which encompasses pricing decisions and network planning policies such as car blocking and routing as well as train make-up and scheduling. An exact solution approach based on a mixed integer formulation adapted to the problem structure is presented, and computational results are reported on randomly generated instances.

► Integration of revenue management and rail freight operations planning. ► Formulation of a compound pricing and capacity management model. ► Analysis of pricing policies, resulting properties and valid inequalities as well as their impact on the formulation. ► Design of a specialized exact solution algorithm adapted to the problem structure.