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Approximation Algorithms for the Bid Construction Problem in Combinatorial Auctions for the Procurement of Freight Transportation Contracts

  • Author(s): Song, Jiongjiong
  • Regan, A C
  • et al.
Abstract

The bid valuation and construction problem for carriers facing combinatorial auctions for the procurement of freight transportation contracts is very difficult and involves the computation of a number of NP-hard sub problems. In this paper we examine computationally tractable approximation methods for estimating these values and constructing bids. The benefit of our approximation method is that it provides a way for carriers to construct optimal or near optimal bids by solving a single NP-hard problem. This represents a significant improvement in efficiency. In addition, this method can be extended to many other applications.

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