, Volume 7, Issue 4, pp 447-471
Date: 15 Nov 2008

A combinatorial intra-enterprise exchange for logistics services

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Abstract

The exchange of cargo capacities is a well established approach in logistics. However, only few logistics marketplaces are able to take into consideration synergies that can be generated by combining different transportation routes of different logistics carrierps. In order to exploit these synergies, we designed and implemented the combinatorial exchange mechanism ComEx for the intra-enterprise exchange of delivery orders in a logistics company organized in a profit center structure. Each profit center is able to release delivery orders to an adjacent profit center if the geographic locations of the customers allow for a reduced-cost delivery by the adjacent profit center. We demonstrate that by using the ComEx mechanism, the total cost of transportation of our logistics company can be reduced by up to 14%. Since our iterative auction mechanism is very complex and therefore resource-intensive, we reduce the complexity by applying a convex hull approach combined with a distance-based cost estimator.