A LINEAR-PROGRAMMING-BASED PRICE NEGOTIATION PROCEDURE FOR CONTRACTING SHIPPING COMPANIES

A procedure for a shipper contracting with ocean container shipping co mpanies is described. The procedure incorporates the solution to a lin ear programming transportation model with results from sensitivity ana lysis. The procedure described enables shippers to evaluate all possib le means of obtaining the lowest adjusted price for a given shipping r oute in a short period of time. Shippers that spend a minimum amount o f time on price negotiation are generally able to accept or reject a p ending offer prior to expiration of a shipping company's imposed time limit. A case study illustrates the negotiation procedure.