Study On Fleet Building Decision For Iron And Steel Enterprises

With the acceleration of China's industrialization, the recent years has witnessed the booming development of steel industry and the increasing demand of iron ore. Due to the high reliance on external trades of iron ore, China's iron and steel enterprises are severely impacted by the freight of shipping. Particularly after the financial crisis, the unpredictable and fluctuating shipping market poses great challenges for them to balance the transport cost and benefit as well as the security of cargo-transportation. As a result, more and more iron and steel enterprises try to build up their own fleet with the purpose of effectively controlling the transport process, reducing the overall cost and improving their competitiveness.In the first place, this thesis analyzes the current supply and demand conditions of iron ore as well as the specific relationship between trade and shipping freight in this market, so as to explain the internal causes and the external forces that motivate iron and steel enterprises to adopt the decision of fleet-building. Then, a risk index evaluation system is designed to clarify the risk that induced by this decision in the market circumstances and corporate operation. Moreover, SWOT method is applied to seek its advantages and drawbacks so as to provide countermeasures for risk-circumvention. In addition, as for the issue of partner selection in building fleet, this thesis not only uses fuzzy comprehensive evaluation method based on AHP to pursue strategic research, but also introduces financial technique featured by TOPSIS to carry out tactical deployment which also take case study into consideration. At last, by applying Dynamic Programming, this thesis establishes a Fleet Planning model which set the sufficient demand of iron ore for iron and steel enterprises as a rule and the minimization of annual total operating cost as its objective function. This model can be used to determine ship deployment in various routes each year. Furthermore, a numerical example is utilized to testify efficiency and feasibility of the model.Through systematic research on fleet-building strategy for iron and steel enterprises, this thesis not only brings innovation in relating theory, but also has its value in realistic guidance.