MAXIMISING PROFITS FROM PASSENGER TRANSPORT SERVICE USING TRANSPORTATION MODEL ALGORITHM (PART 2) - The Advantage of Shadow Pricing

The diversity and complexity of the different types of passenger transportations in operation today invokes the need for an efficient transport service management system. Existing transportation models tend towards proffering solution for finding the least cost combination for delivering cargoes from various depots to known remote customer destinations. This paper which is the second part of the same title adopts shadow pricing to modify the existing model for use in the management of passenger transport services. It uses a case study approach to investigate the effect of non-application of a scientific based approach to vehicle capacity assignment management technique in the Nigerian private transport sector. Using worked examples the paper clearly suggests that adopting the transportation model algorithm for assigning and reassigning vehicle to routes especially during peak periods of activity, holidays or festivities will optimize operational decisions