Centralized bundle generation in auction-based collaborative transportation

Abstract

In horizontal collaborations, carriers form coalitions in order to perform parts of their logistics operations jointly. By exchanging transportation requests among each other, they can operate more efficiently and in a more sustainable way. This exchange of requests can be organized through combinatorial auctions, where collaborators submit requests for exchange to a common pool. The requests in the pool are grouped into bundles, and these are offered to participating carriers. From a practical point of view, offering all possible bundles is not manageable, since the number of bundles grows exponentially with the number of traded requests. We show how the complete set of bundles can be efficiently reduced to a subset of attractive ones. For this we define the Bundle Generation Problem (BuGP). The aim is to provide a reduced set of offered bundles that maximizes the total coalition profit, while a feasible assignment of bundles to carriers is guaranteed. The objective function, however, could only be evaluated whether carriers reveal sensitive information, which would be unrealistic. Thus, we develop a proxy for the objective function for assessing the attractiveness of bundles under incomplete information. This is used in a genetic algorithms-based framework that aims at producing attractive and feasible bundles, such that all requirements of the BuGP are met. We achieve very good solution quality, while reducing the computational time for the auction procedure significantly. This is an important step towards running combinatorial auctions of real-world size, which were previously intractable due to their computational complexity. The strengths but also the limitations of the proposed approach are discussed.