Iterative Combinatorial Auctions In Transportation Services Procurement

The procurement of transportation services is important for shippers because of cost-effective and high service levels. And in the last few years software has been developed so that shippers can make all lanes available for carriers to simultaneously bid upon combinations of individual lanes. It is natural that carriers have different valuations for different combinations of lanes because lanes can be complementary or substitutable and carriers will take advantage of these characteristics to reduce their empty movements and, in addition, to organize their operations in a more efficient way. Therefore, combinatorial auctions has been proposed for procurement of transportation services.Combinatorial auctions are auction formats that allow bidders to place a single bid on a set of distinct items. It would also be possible for a carrier to submit multiple packages consisting of one or more distinct lanes. Combinatorial auctions can result in more efficient allocations in multi-unit auction and can promise mechanisms to allocate lanes since carriers have synergistic preferences for certain lanes.The thesis provides a comprehensive review of the use of combinatorial bidding within a transportation combinatorial auction framework. The thesis first describes the available general forms of the transportation procurement, and discusses the combinatorial auctions mechanisms in transportation procurement before our suggestion. An iterative combinatorial auctions framework which integrates iterative auctions and first price auction is proposed for transportation procurement after a comparison among existing combinatorial auctions mechanisms in this thesis. Then the thesis introduces the basic optimization model which we modeled for carriers considering carriers'existing revenue from their existing businesses in their biddings. And the classical WDP model is used for shipper's allocation of winning bidding. The price update model also is expanded for situation of allowing multi-biddings which is discussed in this thesis. Finally, a worked example is given to illustrate and evaluate our method by comparing the results with other auction mechanisms.