An efficient multi-attribute combinatorial auction for 4PL transportation service procurement

In this paper, we study the mechanism design problem of combinatorial reverse auction for 4PL transportation service procurement (TSP) considering price and multiple non-price attributes. In order to achieve efficient winner determination and transportation request allocation, we develop a 0-1 programing model to minimize social cost, where social cost includes real transportation cost of 3PLs and the costs incurred by non-price attributes. A multi-attribute VCG (MA-VCG) reverse auction mechanism is proposed, which satisfies efficiency, incentive compatibility, individual rationality, and budget balance. Then, a numerical example is designed to demonstrate the effectiveness and applicability of the proposed mechanism. Finally, sensitivity analysis is implemented to illustrate the influences of attribute preference, cost coefficient and other parameters on auction results.