Highway Reservation Pricing for Freight Industry: A Real Options Approach

• Main Authors: Tzu-Ying Cheng, 鄭資穎
• Other Authors: Mei-Ting Tsai
• Format: Others
• Language: en_US
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/78796765880948298220

碩士 === 國立東華大學 === 全球運籌管理研究所 === 98 === Currently, traffic congestion problems are becoming an increasingly common problem in urban areas. In this study, we introduce a highway reservation pricing system for the freight industry using a real options approach. Using a real options approach, the freight industry can save time, deliver their packages in the time window required by customers, increase reliability, decrease total social cost by alleviating traffic congestion etc. For this approach, companies in the freight industry should buy the options before the time they want to use the highway. The option price depends on the time for which they buy the option. Most importantly, to maintain the service level for other vehicles driving on the highway, the option is sold for the specific proportion of the total capacity in a truck only lane. After calculating the call option’s prices, we compare the cost for users who are buying the option and those who are not, as well as considering the cost in cases where users buy the options but do not exercise them. Meanwhile, we also compare the cost of not using versus using the truck only lane option approach. In the end, we conclude that as far as using the real options approach for freight industry goes, doing so can provide the company with benefits, while simultaneously decreasing the social cost, car accidents, the traffic congestion problem, and so on.