IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v233y2021ics0925527320303546.html
   My bibliography  Save this article

Cyber physical system-enabled on-demand logistics trading

Author

Listed:
  • Kong, Xiang T.R.
  • Kang, Kai
  • Zhong, Ray Y.
  • Luo, Hao
  • Xu, Su Xiu

Abstract

On-demand logistics platform has been developed rapidly to respond increasingly customized demands. Many platform-based enterprises are facing difficulties in operating that resulting in inefficient resource allocation, high costs and top-down centralized decision-making process so that unsustainable on-demand delivery is an existing challenge. Such a platform service supply chain is highly influenced by fluctuating supply and demand. To solve this problem, this paper introduces an online double auction for on-demand pickup and delivery in the metropolitan cities, allowing both shippers and carriers dynamically enter and exit transactions. A multi-agent environment is created to automate the real-time auctioning through cyber-physical-system technologies. The proposed method aims at maximizing the social welfare and minimizing trade failures in the face of uncertainty of future agent types or the information of further bids and asks. The approach is extending the well-known McAfee's single-unit method, to allocate multi-unit on-demand logistics tasks using public, private, robot-enabled delivery capacities. It is observed that truthful bidding is a dominant strategy for each agent under this mechanism while realizing budget balance and individual rationality. The results show that the designed auction is more suitable to employ if supply-demand unbalance exists, compared with the fixed pricing mechanism. It suggests using more crowdsourcing resources rather than private carriers to improve transaction efficiency and transportation sustainability.

Suggested Citation

  • Kong, Xiang T.R. & Kang, Kai & Zhong, Ray Y. & Luo, Hao & Xu, Su Xiu, 2021. "Cyber physical system-enabled on-demand logistics trading," International Journal of Production Economics, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:proeco:v:233:y:2021:i:c:s0925527320303546
    DOI: 10.1016/j.ijpe.2020.108005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527320303546
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2020.108005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leon Yang Chu, 2009. "Truthful Bundle/Multiunit Double Auctions," Management Science, INFORMS, vol. 55(7), pages 1184-1198, July.
    2. Lafkihi, Mariam & Pan, Shenle & Ballot, Eric, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 348-365.
    3. Jiaru Bai & Kut C. So & Christopher S. Tang & Xiqun (Michael) Chen & Hai Wang, 2019. "Coordinating Supply and Demand on an On-Demand Service Platform with Impatient Customers," Manufacturing & Service Operations Management, INFORMS, vol. 21(3), pages 556-570, July.
    4. Xiao, Haohan & Xu, Meng & Yang, Hai, 2020. "Pricing strategies for shared parking management with double auction approach: Differential price vs. uniform price," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    5. Wenyi Chen & Martijn Mes & Marco Schutten, 2018. "Multi-hop driver-parcel matching problem with time windows," Flexible Services and Manufacturing Journal, Springer, vol. 30(3), pages 517-553, September.
    6. Firdausiyah, N. & Taniguchi, E. & Qureshi, A.G., 2019. "Modeling city logistics using adaptive dynamic programming based multi-agent simulation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 74-96.
    7. Chu, Leon Yang & Shen, Zuo-Jun Max, 2007. "Trade reduction vs. multi-stage: A comparison of double auction design approaches," European Journal of Operational Research, Elsevier, vol. 180(2), pages 677-691, July.
    8. Tong, Tingting & Dai, Hongyan & Xiao, Qin & Yan, Nina, 2020. "Will dynamic pricing outperform? Theoretical analysis and empirical evidence from O2O on-demand food service market," International Journal of Production Economics, Elsevier, vol. 219(C), pages 375-385.
    9. Paul Karaenke & Martin Bichler & Stefan Minner, 2019. "Coordination Is Hard: Electronic Auction Mechanisms for Increased Efficiency in Transportation Logistics," Management Science, INFORMS, vol. 65(12), pages 5884-5900, December.
    10. Su Xiu Xu & George Q. Huang & Meng Cheng, 2017. "Truthful, Budget-Balanced Bundle Double Auctions for Carrier Collaboration," Transportation Science, INFORMS, vol. 51(4), pages 1365-1386, November.
    11. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    12. Terry A. Taylor, 2018. "On-Demand Service Platforms," Manufacturing & Service Operations Management, INFORMS, vol. 20(4), pages 704-720, October.
    13. Lyu, Xiaohui & Chen, Haoxun & Wang, Nengmin & Yang, Zhen, 2019. "A multi-round exchange mechanism for carrier collaboration in less than truckload transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 38-59.
    14. Lang, N.A. & Moonen, J.M. & Srour, F.J. & Zuidwijk, R.A., 2008. "Multi Agent Systems in Logistics: A Literature and State-of-the-art Review," ERIM Report Series Research in Management ERS-2008-043-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    15. Xiao, Haohan & Xu, Meng & Gao, Ziyou, 2018. "Shared parking problem: A novel truthful double auction mechanism approach," Transportation Research Part B: Methodological, Elsevier, vol. 109(C), pages 40-69.
    16. Mariam Lafkihi & Shenle Pan & Eric Ballot, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Post-Print hal-02086154, HAL.
    17. Dimitrios M. Emiris & Charis A. Marentakis, 2012. "Enhancement of revenue management strategies through location-aware m-auctions for logistics services," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 6(1/2), pages 102-126.
    18. McAfee, R. Preston, 1992. "A dominant strategy double auction," Journal of Economic Theory, Elsevier, vol. 56(2), pages 434-450, April.
    19. Xu, Su Xiu & Huang, George Q., 2013. "Transportation service procurement in periodic sealed double auctions with stochastic demand and supply," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 136-160.
    20. Leon Yang Chu & Zuo-Jun Max Shen, 2006. "Agent Competition Double-Auction Mechanism," Management Science, INFORMS, vol. 52(8), pages 1215-1222, August.
    21. Huang, George Q. & Xu, Su Xiu, 2013. "Truthful multi-unit transportation procurement auctions for logistics e-marketplaces," Transportation Research Part B: Methodological, Elsevier, vol. 47(C), pages 127-148.
    22. Berger, Susanne & Bierwirth, Christian, 2010. "Solutions to the request reassignment problem in collaborative carrier networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(5), pages 627-638, September.
    23. Martijn Mes & Matthieu Heijden & Peter Schuur, 2013. "Interaction between intelligent agent strategies for real-time transportation planning," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(2), pages 337-358, March.
    24. Mariam Lafkihi & Shenle Pan & Eric Ballot, 2019. "The Price of Anarchy for Centralising or Decentralising Freight Transport Organisation Through Serious Gaming," Post-Print hal-02078872, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Juliet Orji, Ifeyinwa & Ojadi, Frank & Kalu Okwara, Ukoha, 2022. "The nexus between e-commerce adoption in a health pandemic and firm performance: The role of pandemic response strategies," Journal of Business Research, Elsevier, vol. 145(C), pages 616-635.
    2. Xiao, Fei & Wang, Haijun & Guo, Shuojia & Guan, Xu & Liu, Baoshan, 2021. "Efficient and truthful multi-attribute auctions for crowdsourced delivery," International Journal of Production Economics, Elsevier, vol. 240(C).
    3. Zhitao Xu & Adel Elomri & Roberto Baldacci & Laoucine Kerbache & Zhenyong Wu, 2024. "Frontiers and trends of supply chain optimization in the age of industry 4.0: an operations research perspective," Annals of Operations Research, Springer, vol. 338(2), pages 1359-1401, July.
    4. Kangye Tan & Fang Xu & Xiaozhao Fang & Chunsheng Li, 2023. "Research on Location Selection for Urban Networks of Less-than-Truckload Express Enterprises Based on Improved Immune Optimization Algorithm," Mathematics, MDPI, vol. 11(6), pages 1-20, March.
    5. Snežana Tadić & Mladen Krstić & Milovan Kovač, 2023. "Assessment of city logistics initiative categories sustainability: case of Belgrade," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1383-1419, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu, Hao & Huang, Min & Chao, Xiuli & Yue, Xiaohang, 2022. "Truthful multi-attribute multi-unit double auctions for B2B e-commerce logistics service transactions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    2. Guo, Jiantao & Zhang, Juliang & Cheng, T.C.E. & Zhao, Shouting, 2022. "Truthful double auction mechanisms for online freight platforms with transaction costs," Transportation Research Part B: Methodological, Elsevier, vol. 158(C), pages 164-186.
    3. Guo, Chaojie & Thompson, Russell G. & Foliente, Greg & Kong, Xiang T.R., 2021. "An auction-enabled collaborative routing mechanism for omnichannel on-demand logistics through transshipment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    4. Xiao, Haohan & Xu, Meng & Gao, Ziyou, 2018. "Shared parking problem: A novel truthful double auction mechanism approach," Transportation Research Part B: Methodological, Elsevier, vol. 109(C), pages 40-69.
    5. Cheng, Meng & Xu, Su Xiu & Huang, George Q., 2016. "Truthful multi-unit multi-attribute double auctions for perishable supply chain trading," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 21-37.
    6. Ding, Xiaoshu & Qi, Qi & Jian, Sisi, 2024. "Truthful online double auctions for on-demand integrated ride-sourcing platforms," European Journal of Operational Research, Elsevier, vol. 317(3), pages 737-747.
    7. Sun, Jiasen & Li, Guo & Xu, Su Xiu & Dai, Wei, 2019. "Intermodal transportation service procurement with transaction costs under belt and road initiative," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 127(C), pages 31-48.
    8. Su Xiu Xu & George Q. Huang & Meng Cheng, 2017. "Truthful, Budget-Balanced Bundle Double Auctions for Carrier Collaboration," Transportation Science, INFORMS, vol. 51(4), pages 1365-1386, November.
    9. Briand, Martin & Franklin, Rod & Lafkihi, Mariam, 2022. "A dynamic routing protocol with payments for the Physical Internet: A simulation with learning agents," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    10. Ding, Xiaoshu & Qi, Qi & Jian, Sisi & Yang, Hai, 2023. "Mechanism design for Mobility-as-a-Service platform considering travelers’ strategic behavior and multidimensional requirements," Transportation Research Part B: Methodological, Elsevier, vol. 173(C), pages 1-30.
    11. Liang, Renchao & Wang, Junwei & Huang, Min & Jiang, Zhong-Zhong, 2020. "Truthful auctions for e-market logistics services procurement with quantity discounts," Transportation Research Part B: Methodological, Elsevier, vol. 133(C), pages 165-180.
    12. Nassim Mrabti & Nadia Hamani & Laurent Delahoche, 2022. "A Comprehensive Literature Review on Sustainable Horizontal Collaboration," Sustainability, MDPI, vol. 14(18), pages 1-38, September.
    13. Sun, Xiaotong & Yin, Yafeng, 2021. "An auction mechanism for platoon leader determination in single-brand cooperative vehicle platooning," Economics of Transportation, Elsevier, vol. 28(C).
    14. Jiasen Sun & Guo Li, 2020. "Designing a double auction mechanism for the re-allocation of emission permits," Annals of Operations Research, Springer, vol. 291(1), pages 847-874, August.
    15. Eirinakis, Pavlos & Mourtos, Ioannis & Zampou, Eleni, 2022. "Random Serial Dictatorship for horizontal collaboration in logistics," Omega, Elsevier, vol. 111(C).
    16. Mashalah, Heider Al & Hassini, Elkafi & Gunasekaran, Angappa & Bhatt (Mishra), Deepa, 2022. "The impact of digital transformation on supply chains through e-commerce: Literature review and a conceptual framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    17. Leon Yang Chu, 2009. "Truthful Bundle/Multiunit Double Auctions," Management Science, INFORMS, vol. 55(7), pages 1184-1198, July.
    18. Leon Yang Chu & Zuo-Jun Max Shen, 2008. "Truthful Double Auction Mechanisms," Operations Research, INFORMS, vol. 56(1), pages 102-120, February.
    19. Dütting, Paul & Talgam-Cohen, Inbal & Roughgarden, Tim, 2017. "Modularity and greed in double auctions," LSE Research Online Documents on Economics 83199, London School of Economics and Political Science, LSE Library.
    20. He, Shan & Dai, Ying & Ma, Zu-Jun, 2023. "To offer or not to offer? The optimal value-insured strategy for crowdsourced delivery platforms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:233:y:2021:i:c:s0925527320303546. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.