Reputation-based winner determination problem for combinatorial transportation procurement auctions

Abstract

This paper proposes a reputation-based winner determination problem for transportation procurement auctions where the allocation of long-term contracts to carriers is decided with respect to both bid ask-prices and carriers reputation. The objective is to manage the trade-off between transport costs and the quality of service during operations. Carriers reputation is translated into unexpected hidden cost that represents the possible additional cost that the shipper may incur when dealing with a set of winning carriers. This cost depends essentially on the carriers reputation as evaluated by the shipper running the auction. To evaluate carriers reputations, the shipper uses a number of service attributes with different weights depending on shipping contracts.

Keywords:

• winner determination problem
• carrier reputation
• transportation procurement
• combinatorial auctions

Acknowledgements

This work was supported by the Natural Sciences and Engineering Research Council of Canada through its Discovery Grants programmes.

Notes

1 To the best of our knowledge, there is no study that reports the values of the damaged and cancelled shipments attributes for motor carriers.