Price optimization for transportation service procurement with fuzzy random shipments: from shipper’s perspective

Abstract

This paper considers fuzzy random shipments and seeks to optimize transportation service prices from a shipper’s perspective. To determine suitable prices, the carriers’ existing networks and possible reactions are considered, so that the shipper can easily and effectively purchase the required services while optimizing total cost. Two objectives are considered for the shippers, minimizing total cost and total risk. For the carrier, the objective is to maximize carrier profits. Multi-objective expected bi-level programming is developed to incorporate the decision makers’ preferences. After establishing the model with uncertain data, multi-objective particle swarm optimization is proposed to solve the model. A case study and analysis are then presented to illustrate the effectiveness of the proposed model and approach.

Keywords:

• Transportation service procurement
• fuzzy random environment
• bi-level programming
• particle swarm optimization