Pricing in dynamic vehicle routing problems

The principal focus of this paper is to study carrier pricing decisions for a new type of vehicle routing problems defined in a competitive and dynamic environment. This paper introduces the Vehicle Routing Problem in a Competitive Environment (VRPCE), as an extension of the Traveling Salesman Problem with Profits (TSPP) to a dynamic competitive auction environment. In the VRPCE, the carrier must estimate the incremental cost of servicing new service requests as they arrive dynamically. The paper presents a rigorous and precise treatment of the sequential pricing and costing problem that a carrier faces in such an environment. The sequential pricing problem presented here is an intrinsic feature of a sequential auction problem. In addition to introducing the formulation of this class of problems and discussing the main sources of difficulty in devising a solution, a simple example is constructed to show that carriers' prices under first price auction payment rules do not necessarily reflect the cost of servicing transportation requests. An approximate solution approach with a finite look-ahead horizon is presented and illustrated through numerical experiments, in competition with a static approach with no look-ahead.(a)

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/14403501
• Authors:
  • FIGLIOZZI, M A
  • MAHMASSANI, H S
  • JAILLET, P
• Publication Date: 2006-4

Language

• English

Media Info

• Pagination: 32P
• Serial:
  • Institute of Transport Studies and Logistics Working Paper
  • Issue Number: ITLS- WP-06-10
  • Publisher: INSTITUTE OF TRANSPORT STUDIES AND LOGISTICS
  • ISSN: 1440-3501

Subject/Index Terms

• TRT Terms: Competition; Costs; Economics; Freight transportation; Intelligent transportation systems; Itinerary; Logistics; Profits; Transportation
• Uncontrolled Terms: Guidance
• ITRD Terms: 235: Competition; 224: Cost; 255: Economics; 1112: Freight transport; 9104: Guidance; 8735: Intelligent transport system; 699: Itinerary; 264: Logistics; 217: Profit; 1155: Transport
• Subject Areas: Economics; Operations and Traffic Management; Planning and Forecasting; Transportation (General); I10: Economics and Administration; I72: Traffic and Transport Planning;

Filing Info

• Accession Number: 01043183
• Record Type: Publication
• Source Agency: ARRB
• Files: ITRD, ATRI
• Created Date: Mar 6 2007 8:26AM