Title :
A transportation service procurement problem with combinatorial auction
Author :
Tian, Tian ; Wang, Ning ; Ma, Hong ; Lim, Andrew
Author_Institution :
Dept. of Manage. Sci., City Univ. of Hong Kong, Hong Kong, China
Abstract :
This paper discusses a practical transportation service procurement problem, which is originated from an external project with the department of transportation purchasing at Royal Philips. A combinatorial auction strategy is developed to help the department to determine the annual transportation service procurement cost. Because of a few preset internal and external policies, to settle an optimal purchasing plan becomes a challenging job for the company. We formulate this problem into a linear integer programming model, and prove it is MV-Hard. We also find that the integer programming model is only solvable for very small cases with only a few lanes, bidders and bids using the state-of-the-art commercial solver ILOG CPLEX 11. We propose an iterative rounding heuristic algorithm that works on the linear-relaxation of the integer programming model. Experiments show that good-quality solutions are achieved for instances of moderate size.
Keywords :
integer programming; iterative methods; linear programming; purchasing; transportation; ILOG CPLEX 11 solver; MV-hard problem; combinatorial auction strategy; iterative rounding heuristic algorithm; linear integer programming model; optimal purchasing plan; transportation service procurement problem; Companies; Heuristic algorithms; Linear programming; Procurement; Programming; Transportation; Upper bound; combinatorial auction; iterative rounding heuristic; transportation service procurement;
Conference_Titel :
Service Systems and Service Management (ICSSSM), 2011 8th International Conference on
Conference_Location :
Tianjin
Print_ISBN :
978-1-61284-310-0
DOI :
10.1109/ICSSSM.2011.5959369