Civil and Environmental Engineering Commons^™

Pricing In Dynamic Vehicle Routing Problems, Miguel Andres Figliozzi, Hani S. Mahmassani, Patrick Jaillet

Civil and Environmental Engineering Faculty Publications and Presentations

The principal focus of this paper is to study carrier pricing decisions for a type of vehicle routing problems defined in a competitive and dynamic environment. This paper introduces the vehicle routing problem in a competitive environment (VRPCE) as an extension of the traveling-salesman problem with profits (TSPP) to a dynamic competitive auction environment. In the VRPCE, the carrier must estimate the incremental cost of servicing new service requests as they arrive dynamically. The paper presents a rigorous and precise treatment of the sequential pricing and costing problem that a carrier faces in such an environment. The sequential pricing problem …