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Inventory Management
Published in N.V.S. Raju, Operations Research, 2019
Limitations of EOQ:Ordering to the nearest quantities or packing. Say, instead of ordering 11 dozens, the order may be one gross. This may not be economic.Modifying an order to get a better freight rate. The saving in freight may be more than compensation the extra holding cost.Simplification of routine becomes difficult: Instead of 13 times a year, one may order once a month (once in every four weeks gives 13, monthly once gives 12 order)In case of perishable, or bulky items with diminishing consumption or for items whose market, prices are likely to decline, it may be better to order less than theoritical order quantity.Seasonal supply factors, market conditions, availability of transport etc., may indicate larger or smaller purchase quantities. In these situations, judgement should be given more weight.Liberal discounts or concessional freight rates may suggest larger quantities. The pros and cons of such purchase should be weighted carefully before taking the decision.
A methodology for the holistic, simulation driven ship design optimization under uncertainty
Published in Pentti Kujala, Liangliang Lu, Marine Design XIII, 2018
L. Nikolopoulos, E. Boulougouris
The market and economic competitiveness of a an individual vessel variant is the core of any optimization as a vessel will always be an asset (of high capital value) and can be expressed by the following indices: Required Freight Rate.The required freight rate is the hypothetical freight which will ensure a break even for the hypothetical shipowner between the operating costs, capital costs and its income based on the annual voyages as well as collective cargo capacity and is such expressed in USD per ton of cargo.Operating Expenditure (OPEX).The operating expenditure expressed on a daily cost includes the cost for crewing, insurance, spares, stores, lubricants, administration etc. It can indicate apart from the operator’s ability to work in a cost effective structure, how the vessel’s design characteristics can affect. The lubricant cost is based on actual feed rates used for subject engines as per the relevant service letter SL2014-537 of MAN [14].Capital Expenditure (CAPEX).The CAPEX is a clear indication of the cost of capital for investing and acquisition of each individual design variant. The acquisition cost is calculated from a function derived from actual market values and the lightship weight for vessels built in Asian shipyards, and more specifically in China.
Quantitative modelling of shipping freight rates: developments in the past 20 years
Published in Maritime Policy & Management, 2022
Luqi Ke, Qing Liu, Adolf K.Y. Ng, Wenming Shi
The term ‘freight rate’ is widely used in ocean shipping studies. It can be generally defined as the ‘amount of money paid to a shipowner or shipping line for the carriage of each unit of cargo (tonnage, cubic meter, or container load) between named ports’ (Stopford 2009). However, it often means different subjects across the ocean shipping sectors and contract types. The data and methods applied in the literature also reflect the different fundamental understandings of the definition of ‘freight rate’ in ocean shipping. Notably, for the bulk shipping sectors (i.e., dry bulk and tanker), the freight rate is essentially the vessel hiring price (formally called as vessel fixture rate), which can be a time-limited hiring (a time charter [TC] contract) or a mission-limited hiring (a voyage charter contract). In contrast, the container shipping sector has a clear two-level market structure, that is, the ‘upper’ containership charter market where the time-charter rate is paid by the charterers to the shipowners, and the ‘lower’ freight market where the shipment price is paid by the shippers to the carriers. Furthermore, in the shipping freight derivatives market, rates of Forward Freight Agreements (FFAs) (traded either as freight futures or freight options) are used (Stopford 2009), although strictly, these are not freight rates.