Centralized bundle generation in auction-based collaborative transportation

Properties of bundle valuations in carrier collaboration

Combinatorial auctions are an important part of many frameworks for carrier collaboration in logistics. In the last years, many innovative auction mechanisms have been developed in the economic literature that could potentially be applied in this context and that could significantly simplify the process of determining efficient allocations of requests. These mechanisms rely on certain assumptions about the valuations of bidders. In this paper, we perform computational experiments to analyze to which extent these requirements are fulfilled for valuations derived from a simple logistics problem, the Traveling Salesman Problem. We find that bidders' valuations typically violate even very elementary requirements, but that these violations affect only a limited number of request bundles. We further analyze whether these violations exhibit a consistent pattern across multiple carriers and check consistency if route lengths are calculated exactly or approximated.

Supplementary Information

The online version contains supplementary material available at 10.1007/s10100-023-00873-1.

Assignment constraints in shared transportation services

Competitive markets, increased fuel costs, and underutilized vehicle fleets are characteristics that currently define the logistics sector. Given an increasing pressure to act in a manner that is economically and ecologically efficient, mechanisms that help to benefit from idle capacities are on the rise. In the Sharing Economy, collaborative usage is typically organized through platforms that facilitate the exchange of goods or services. Our study examines a collaborative pickup and delivery problem where carriers can exchange customer requests. The aim is to quantify the potential of horizontal collaborations under a centralized framework. An Adaptive Large Neighborhood Search is developed to solve yet unsolved test instances. A computational study confirms the results of past studies which have reported cost savings between 20 and 30%. In addition, the numerical results indicate an even greater potential for settings with a high degree of regional customer overlap. Unfortunately, these high collaborative gains typically come at the cost of an uneven customer distribution, which is known to be one of the main barriers that prevent companies from entering into horizontal collaborations. To generate acceptable solutions for all participants, several constraints are included in the model. The introduction of these constraints to single-vehicle instances, decreases the potential collaborative gain considerably. Surprisingly, this does not happen in more realistic settings of carriers operating multiple vehicles. Overall, the computational study shows that centralized collaborative frameworks have the potential to generate considerable cost savings, while at the same time limiting customer or profit share losses and enabling carriers to keep some of their most valued customers.

The cost of incentive compatibility in auction-based mechanisms for carrier collaboration

Collaboration has been one of the important trends in vehicle routing. A typical mechanism to enable carrier collaboration is to use combinatorial auctions, where requests are not traded individually but are combined into bundles. Previous literature on carrier collaboration has focused on issues such as bundle formation or winner determination, typically assuming truthfulness of all agents and absence of any strategic behavior. This article considers the interdependencies and problems that arise from bidders acting as buyers and sellers of requests at the same time. From standard auction theory, desirable properties of exchange mechanisms are identified as efficiency, incentive compatibility, individual rationality, and budget balance. It is shown that these desirable properties cannot be fulfilled at the same time. In particular, the properties efficiency and incentive compatibility induce that budget balance is violated, that is, an outside subsidy is required. We propose two incentive compatible exchange mechanisms. One is more closely related to the classical VCG approach, while the other one uses a more complicated concept for computing payments to participants. A numerical study investigates how frequently desired properties are violated. We show that both mechanisms can be acceptable in practical situations, but none of them can satisfy all desired properties.

The collaborative multi-level lot-sizing problem with cost synergies

Collaborative operations planning is a key element of modern supply chains. We introduce the collaborative multi-level lot-sizing problem with cost synergies. This arises if producers can realise reductions of their costs by providing more than one product in a specific time horizon. Since producers are typically not willing to reveal critical information, we propose a decentralised mechanism, where producers do not have to reveal their individual items costs. Additionally, a Genetic Algorithms-based centralised approach is developed, which we use for benchmarking. Our study shows that this approach comes very close to the a central plan, while in the decentralised one no critical information has to be shared. We compare the results to a myopic upstream planning approach, and show that these results are almost 12% worse than the centralised ones. All solution approaches are assessed on available test instances for problems without cost synergies. For the biggest available instances, the proposed centralised mechanism improves the best known solutions on average by 10.8%. The proposed decentralised mechanism can be applied to other problem classes, where collaborative decision makers aim for good plans under incomplete information.