Dynamic threshold policy for delaying and breaking commitments in transportation auctions

In this paper we consider a transportation procurement auction consisting of shippers and carriers. Shippers offer time sensitive pickup and delivery jobs and carriers bid on these jobs. We focus on revenue maximizing strategies for shippers in sequential auctions. For this purpose we propose two strategies, namely delaying and breaking commitments. The idea of delaying commitments is that a shipper will not agree with the best bid whenever it is above a certain reserve price. The idea of breaking commitments is that the shipper allows the carriers to break commitments against certain penalties. The benefits of both strategies are evaluated with simulation. In addition we provide insight in the distribution of the lowest bid, which is estimated by the shippers

Replacement of the Legacy High-Cost Universal Support Fund with a Connect America Fund. Key Economic and Legal Considerations

On April 21, 2010, the Federal Communications Commission (FCC) released a Notice of Inquiry (NOI) and a Notice of Proposed Rulemaking (NPRM) that seek the public’s input on the FCC’s effort to replace the legacy high-cost universal service fund (USF) with a broadband “Connect America” fund (CAF). In effect, the FCC seeks to implement cost-cutting measures for existing voice support (USF) and create a new fund (CAF) to support the provision of broadband communications in areas that would be unserved without such support or that depend on USF support for the maintenance of existing broadband service. An initial review of the NOI/NPRM raises a number of key economic and legal considerations. In the following, we identify some of the considerations, questions, and challenges raised by the FCC’s USF reform attempt, which is likely to have far-reaching consequences not only for operators that currently rely on USF subsidies or broadband providers in high-cost regions but for the entire communications industry.The purpose of this note is not to provide an all-inclusive list of, or responses to, the critical questions raised by the NOI/NPRM, but rather to illustrate the complexities of this proceeding and the impact the proposed reforms may have on industry performance. As the CAF is necessary for the success of the FCC’s National Broadband Plan (NBP), the policy directions taken by the FCC in establishing it are critically important. USF reform is also essential to the performance and competitiveness of the U.S. communications industry and policy missteps could have serious economic and legal consequences.Federal Communications Commission, America Fund

A graphical formalism for mixed multi-unit combinatorial auctions

Mixed multi-unit combinatorial auctions are auctions that allow participants to bid for bundles of goods to buy, for bundles of goods to sell, and for transformations of goods. The intuitive meaning of a bid for a transformation is that the bidder is offering to produce a set of output goods after having received a set of input goods. To solve such an auction the auctioneer has to choose a set of bids to accept and decide on a sequence in which to implement the associated transformations. Mixed auctions can potentially be employed for the automated assembly of supply chains of agents. However, mixed auctions can be effectively applied only if we can also ensure their computational feasibility without jeopardising optimality. To this end, we propose a graphical formalism, based on Petri nets, that facilitates the compact represention of both the search space and the solutions associated with the winner determination problem for mixed auctions. This approach allows us to dramatically reduce the number of decision variables required for solving a broad class of mixed auction winner determination problems. An additional major benefit of our graphical formalism is that it provides new ways to formally analyse the structural and behavioural properties of mixed auctions. © 2009 Springer Science+Business Media, LLC.This work was funded by the Jose Castillejo programme (JC2008-00337), IEA (TIN2006-15662-C02-01), OK (IST-4-027253-STP), eREP(EC-FP6-CIT5-28575) and Agreement Technologies (CONSOLIDER CSD2007-0022, INGENIO 2010)Peer Reviewe

Software Characteristics of B2B Electronic Intermediaries: A Novel Design Science Approach

Long being seen as commercially unsuccessful after the dot-com era, web-based B2B electronic intermediaries are currentlyundergoing a renaissance driven by globalization and an ever increasing cost-pressure on procurement departments ofenterprises. These systems are getting more sophisticated almost by the day, which is also reflected by numerous relatedscientific articles. This development raises the question of the latest characteristics of such systems scientifically described.In order to answer this question, the work at hand depicts the results of a novel design science approach based on a structuredliterature review. The outcomes of this research are i) a state-of-the-art overview of scientifically described softwarecharacteristics of B2B electronic intermediaries, and ii) a taxonomy for structuring software characteristics of this type ofsystems. The results may help practitioners to further develop B2B electronic intermediaries and e-procurement systems, andwill serve as a basis for future research endeavors in the field

Iterative Combinatorial Auctions: Theory and Practice

Combinatorial auctions, which allow agents to bid directly for bundles of resources, are necessary for optimal auction-based solutions to resource allocation problems with agents that have non-additive values for resources, such as distributed scheduling and task assignment problems. We introduce iBundle, the first iterative combinatorial auction that is optimal for a reasonable agent bidding strategy, in this case myopic best-response bidding. Its optimality is proved with a novel connection to primal-dual optimization theory. We demonstrate orders of magnitude performance improvements over the only other known optimal combinatorial auction, the Generalized Vickrey Auction.Engineering and Applied Science

Truckload Shipment Planning and Procurement

This dissertation presents three issues encountered by a shipper in the context of truckload transportation. In all of the studies, we utilize optimization techniques to model and solve the problems. Each study is inspired from the real world and much of the data used in the experiments is real data or representative of real data. The first topic is about the freight consolidation in truckload transportation. We integrate it with a purchase incentive program to increase truckload utilization and maximize profit. The second topic is about supporting decision making collaboration among departments of a manufacturer. It is a bi-objective optimization model. The third topic is about procurement in an adverse market. We study a modification of the existing procurement process to consider the market stochastic into marking decisions. In all three studies, our target is to develop effectively methodologies to seek optimal answers within a reasonable amount of time

Algorithms for bundling and pricing trucking services: Deterministic and stochastic approaches

Bundling and pricing trucking services is an important strategic decision for carriers. This is helpful when they consider the incorporation of new businesses to their networks, look for economic and optimal operations, and develop revenue management strategies. Reverse combinatorial auctions for trucking services are real-world examples that illustrate the necessity of such strategies. In these auctions, a shipper asks carriers for quotes to serve combinations of lanes and the carriers have to bundle demand and price it properly. This dissertation explores several dimensions of the problem employing state-of-the-art analytical tools. These dimensions include: Truckload (TL) and less-than-truckload (LTL) operations, behavioral attributes driving the selection of trucking services, and consideration of deterministic and stochastic demand. Analytical tools include: advanced econometrics, network modeling, statistical network analysis, combinatorial optimization, and stochastic optimization. The dissertation is organized as follows. Chapter 1 introduces the problem and related concepts. Chapter 2 studies the attributes driving the selection of trucking services and proposes an econometric model to quantify the shipper willingness to pay using data from a discrete choice experiment. Chapter 3 proposes an algorithm for demand clustering in freight logistics networks using historical data from TL carriers. Chapter 4 develops an algorithmic approach for pricing and demand segmentation of bundles in TL combinatorial auctions. Chapter 5 expands the latter framework to consider stochastic demand. Chapter 6 uses an analytical approach to demonstrate the benefits of in-vehicle consolidation for LTL carriers. Finally, Chapter 7 proposes an algorithm for pricing and demand segmentation of bundles in LTL combinatorial auctions that accounts for stochastic demand. This research provides meaningful negotiation guidance for shippers and carriers, which is supported by quantitative methods. Likewise, numerical experiments demonstrate the benefits and efficiencies of the proposed algorithms, which are transportation modeling contributions

Strategic and operational services for workload management in the cloud

In hosting environments such as Infrastructure as a Service (IaaS) clouds, desirable application performance is typically guaranteed through the use of Service Level Agreements (SLAs), which specify minimal fractions of resource capacities that must be allocated by a service provider for unencumbered use by customers to ensure proper operation of their workloads. Most IaaS offerings are presented to customers as fixed-size and fixed-price SLAs, that do not match well the needs of specific applications. Furthermore, arbitrary colocation of applications with different SLAs may result in inefficient utilization of hosts' resources, resulting in economically undesirable customer behavior. In this thesis, we propose the design and architecture of a Colocation as a Service (CaaS) framework: a set of strategic and operational services that allow the efficient colocation of customer workloads. CaaS strategic services provide customers the means to specify their application workload using an SLA language that provides them the opportunity and incentive to take advantage of any tolerances they may have regarding the scheduling of their workloads. CaaS operational services provide the information necessary for, and carry out the reconfigurations mandated by strategic services. We recognize that it could be the case that there are multiple, yet functionally equivalent ways to express an SLA. Thus, towards that end, we present a service that allows the provably-safe transformation of SLAs from one form to another for the purpose of achieving more efficient colocation. Our CaaS framework could be incorporated into an IaaS offering by providers or it could be implemented as a value added proposition by IaaS resellers. To establish the practicality of such offerings, we present a prototype implementation of our proposed CaaS framework

Multiattribute electronic procurement using goal programming

One of the key challenges of current day electronic procurement systems is to enable procurement decisions transcend beyond a single attribute such as cost. Consequently, multiattribute procurement have emerged as an important research direction. In this paper, we develop a multiattribute e-procurement system for procuring large volume of a single item. Our system is motivated by an industrial procurement scenario for procuring raw material. The procurement scenario demands multiattribute bids, volume discount cost functions, inclusion of business constraints, and consideration of multiple criteria in bid evaluation. We develop a generic framework for an e-procurement system that meets the above requirements. The bid evaluation problem is formulated as a mixed linear integer multiple criteria optimization problem and goal programming is used as the solution technique. We present a case study for which we illustrate the proposed approach and a heuristic is proposed to handle the computational complexity arising out of the cost functions used in the bids