multiple carriers operating in a transportation
network form a collaborative alliance to share their
transportation requests and vehicle capacities, in
order to increase their vehicle utilization rates and
reduce their empty back hauls. Initially, each carrier
has acquired certain requests from shippers (the
customers of the carrier), where each request is
specified by a pickup location and a time window, a
quantity, and a delivery location and a time window.
We assume that all requests acquired by the alliance
are available to all carriers, this implies that all the
requests must be reallocated among all the carriers
by using a collaborative transportation planning
method. If a request acquired by a carrier is not
served by itself, then the carrier has to transfer part
of the revenue of the request paid by a shipper to the
carrier serving the request. The objective of the
collaborative planning is to find an allocation of
requests to each carrier as well as optimal vehicle
tours for executing the allocated requests subject to
the capacity constraint of each vehicle and the time
window constraints of each request so that the total
profit of the alliance is maximized. After the request
reallocation, the profit of the alliance must be fairly
allocated among all the carriers so that they are
willing to remain in the alliance. For simplicity, in
this study we assume that all carriers have vehicles
of the same capacity and each carrier uses the same
tariffs to calculate its transportation costs.
3 PRICE-SETTING BASED
COMBINATORIAL AUCTION
FRAMEWORK
Motivated by a combinatorial auction mechanism
for truckload transportation service procurement
(Kwon et al., 2005; Lee et al., 2007), we propose a
combinatorial auction framework with associated
models for CCPLTL. In this framework, the
reallocation of transportation requests among
carriers is realized through a multi-round
combinatorial auction. Two types of actors exist in
our framework, auctioneer and bidders. The
auctioneer is a virtual coordinator who sets and
updates the price of serving each request. The
objective of the auctioneer is to maximize the total
profit of the alliance subject to the constraint that
each request is allocated to at most one carrier
finally. The bidders, who are the carriers, select their
preferable requests to serve by maximizing their
individual profits based on the prices proposed by
the auctioneer. Contrary to the quantity-setting based
combinatorial auction which requires the pre-
selection of preferable bundles by each carrier in
each round, our proposed auction is a lagrangian
relaxation based price-setting auction which does
not require the pre-selection. The auction framework
we propose consists of the following steps.
(1) Before the auction, each carrier (bidder)
submits its requests open to auction to the auctioneer
through a common platform. These requests are
recorded in a request pool for auction of the
auctioneer. Every request has an ask price offered by
a shipper (the amount of money paid by the shipper
for the service of the request). This price is kept by
the carrier who receives the request and will not be
known by other carriers.
(2) The auctioneer sets an initial price (referred to
as outsourcing price hereafter) for serving each
request in the pool, which is equal to or less than the
ask price of the request.
(3) The bidders express their selections of requests
based on the current outsourcing prices of all
requests announced by the auctioneer. All requests
in the pool are available to each bidder, and each
bidder selects a set of available requests to serve to
maximize its own profit. The decision problem of
each carrier is referred to as a bidding problem
which will be formulated in the next section.
(4) The auctioneer adjusts the outsourcing price of
each request. By relaxing the constraints that each
request is served by at most one bidder using
lagrangian relaxation, the prices are adjusted based
on the subgradient which is defined as the violations
of the relaxed constraints by the current request
selections of all bidders.
(5) Repeating the above steps (3) and (4) until a
stopping criterion is satisfied, namely, all requests in
the pool are reallocated to at most one carrier or the
current best allocation can not be improved in a
given number of iterations, or a given number of
iterations are achieved.
(6) If there are still some requests selected by more
than one bidder after the above mentioned iterative
auction process is terminated, a random conflict
resolution method is applied to reallocate the
requests to the bidders.
(7) After the iterative auction process, each bidder
gains a profit by serving some requests (referred to
as pre-profit hereafter), which is calculated by
solving the relevant bidding problem. The auctioneer
holds a residual profit which is the difference
between the total profit of the alliance and the pre-
profits of all the carriers. This residual profit is
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