Operations Research, Systems Engineering and Industrial Engineering Commons^™

Improved Opportunity Cost Algorithm For Carrier Selection In Combinatorial Auctions, Viswanath Uma Gnanasekaran

LSU Master's Theses

Transportation costs constitute up to thirty percent of the total costs involved in a supply chain. Outsourcing the transportation service requirements to third party logistics providers have been widely adopted, as they are economically more rational than owning and operating a service. Transportation service procurement has been traditionally done through an auctioning process where the auctioneer (shipper) auctions lanes (distinct delivery routes) to bidders (carriers). Individual lanes were being auctioned separately disallowing the carriers to express complements and substitutes. Using combinatorial auctions mechanism to auction all available lanes together would allow the carriers to take advantage of the lane bundles, …