Mechanism design for enterprise transportation outsourcing based on combinatorial auction

In order to reduce logistics costs, plenty of enterprises outsource transportation service to a third logistics service provider. As transportation involves a number of routes, outsourcing may be distributed to several logistics service providers. In this paper, combinatorial auction and mechanism design theory are introduced to transportation routes planning. logistics service providers are selected by bidding. A feasible mechanism maximizes the common profits of both the enterprise and logistics service providers are designed. The mechanism satisfies incentive compatibility, individual rationality and ex post budget balance. Besides, an available algorithm is proposed for solving such a problem.