Highlights We study a new variant of the winner determination problem that mitigates the risk of the uncertain cost exceeding a prescribed budget. We propose a two-stage sample robust optimization model for the problem. We reformulate the model to a mixed-integer linear program using duality theory and linear decision rule. Simulation studies validate the efficacy of our model compared to the traditional stochastic programming and robust optimization models. We explore the value of information and the impact of different system parameters to generate insights to the managers.

    Abstract We study a winner determination problem (WDP) to help shippers in determining the winning bids proposed by carriers in a combinatorial auction for transportation service procurement. The winning carriers, together with spot market carriers which may be optional, undertake the shipper’s annual shipment tasks that are uncertain in the auction stage; completing the tasks incurs a total cost. In particular, the shipper wants to control the total cost under a prescribed purchase budget, resulting in a new problem variant—the WDP with purchase budget (B-WDP). To mitigate both the probability and magnitude of cost overrun, we introduce the Essential Riskiness Index (Zhang et al., 2019) as the decision criterion. Considering the inaccuracy in each predicted scenario/sample of shipment volumes, we allow for some perturbation around each sample and formulate a two-stage sample robust optimization model for the B-WDP. We analyze the properties of the model and, via linear decision rule and duality theory, reformulate it as a mixed-integer linear program solvable via state-of-the-art solvers. By extensive comparative studies against the traditional stochastic and robust models for the WDP, we demonstrate that our two-stage sample robust B-WDP model effectively reduces the expectation of cost overrun and the worst-case total cost. Additional sensitivity analysis confirms that our model consistently and effectively helps shippers mitigate cost overrun.


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    Titel :

    Winner determination problem with purchase budget for transportation procurement under uncertain shipment volume


    Beteiligte:
    Li, Ningxin (Autor:in) / Zhang, Yu (Autor:in) / Tiwari, Sunil (Autor:in) / Kou, Gang (Autor:in)


    Erscheinungsdatum :

    2023-05-28




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch