Business Administration, Management, and Operations Commons^™

Integrating Strategic And Tactical Rolling Stock Models With Cyclical Demand, Michael F. Gorman

MIS/OM/DS Faculty Publications

In the transportation industry, companies position rolling stock where it is likely to be needed in the face of a pronounced weekly cyclical demand pattern in orders.

Strategic policies based on assumptions of repetition of cyclical weekly patterns set rolling stock targets; during tactical execution, a myriad dynamic influences cause deviations from strategically set targets. We find that optimal strategic plans do not agree with results of tactical modeling; strategic results are in fact suboptimal in many tactical situations. We discuss managerial implications of this finding and how the two modeling paradigms can be reconciled.