Containers
Containers

Storage or shipping containers, shelf space

Containers merit their own Asset class because of their value and unique characteristics.  Businesses that sell capacity are often best modeled using Container logic, whether the container is a classic “box,” such as a shipping container, or another kind of valuable capacity, such as advertising space in a business publication.

In optimization applications, containers are usually governed by multiple overlapping sets of rules and costs.  These rules represent both challenges and opportunities.  The challenge is to find the best solutions that follow all of the rules.  The opportunities are to try different combinations in different circumstances that follow the rules and maximize the formal objective function, which is typically greatest asset utilization and minimized repositioning.

At Princeton Consultants we group these rules and costs into: physical, regulatory, contractual, marketplace, policy, and practical.

  • Physical and Regulatory: The capacity of a container may vary depending on simultaneous constraints.  For instance, in freight transportation such as the freight railroad, weight and cube maximums govern capacity.  For the airline, passengers book with multiple sized parties, and the plane’s capacity is measured by seats.
  • Contractual: Often, capacity is discounted if the buyer guarantees usage.  For the service network company, high volume users are given different rates and service guarantees than are smaller accounts.
  • Marketplace and Policy: For the business publication, optimizing advertising revenue means juggling multiple layouts and configurations to achieve for each customer the space with the most impact and readership/viewership.
  • Practical: The best optimization gives a business an edge by enforcing practical rules. For the pharmaceutical company, reducing the number of “change outs” in the test trays that held the sample tubes had the practical impact of reducing errors by the lab staff.