Algorithm for container terminal expansion by marginal approach

Abstract

Modeling of container terminal expansion by marginal approach has received attention of many researchers. Dekker (2008), for example, proposed the used of marginal approach for container port expansion. His attention was timing of the first investment, capacity expansion, and interval capacity within expansion horizon. The expansion variable is in twenty-foot equivalent unit (TEU) basis. Dekker (2008), managed to estimate the investment size (TEU) and interval capacity which included timing of the first investment, t. TEU 1 at t + δ t 1 and TEU 2 at t + δ t 2. His model did not consider expansion of other components of container port such as container park area, container freight station area, berth length, container handling equipment and terminal other area. A container port expansion model based on marginal approach should estimate expansion required for these components based on changes in demand. Treatment of each of these components should be done separately for an increase in demand may require one component to be immediately expanded while other components may easily coped with and sustain the increase in demand. As such period of sustenance of each of the component could be established by pertaining a simulated planning over a long period of planning horizon. This study develops the mathematical model to comprehensively calculate capacity required, planning horizon, expansion size, expansion time and economic viability of each marginal expansion. The model expand and form then improve Dekker (2008) model by incorporating major expandable component of a container port and establishing suitable mathematical concepts on optimum capacity planning.