An Integrated Short-Term Demand Forecasting and Optimal Pricing for Rail Freight Transportation

Abstract

In the freight rail industry, profit maximization relies heavily on the integration of freight transport activities with an improved pricing management. The pricing policies chosen by the carrier have an important impact on the enterprise revenue. This paper bridges the gap between short-term demand forecasting and pricing management. We propose a new mathematical formulation which encompasses pricing decisions and short-term demand prediction on the base of considering the prediction deviation. The revenue from the optimal pricing model has a more substantial increase than the uniform pricing based on the results of the case.