A path-based capacitated network flow model for empty railcar distribution

In this paper we develop a novel formulation for the empty railcar distribution problem that considers realistic technical and business requirements while assigning empty cars to customer demands. The proposed model takes block and train capacities into account, while satisfying the supply and demand constraints, and allows car substitutability among pools of the same car type as well as customer preferences towards different pools. Following the practice in US railroads, the proposed model does not combine car routing and car distribution decisions. Those two decisions are separated from each other and they are usually made by different departments in US railroads. The model is implemented in CPLEX Concert Technology using Java and is illustrated in a numerical example. Results show that the proposed model can improve several performance measures over the noncapacitated model which is currently used by industry.