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Sustainability and flexibility are two main factors not being investigated explicitly by existing winner determination literature. From a fourth party logistics (4PL) provider's point of view, an innovative sustainable-flexible winner determination problem under uncertain demand is particularly studied in transportation services procurement auctions. Based on a multi-attribute decision-making method, a linear constraint related to each bidder's sustainability score and flexibility score can be constructed, and then we integrate an outside option policy to formulate a two-stage stochastic sustainable-flexible winner determination model. Subsequently, we develop an approximation approach to solve the model based on the principles of dual decomposition Lagrangian relaxation and the sample average approximation. Using an established generator to obtain random instances, the effectiveness and applicability of this research could be verified by conducting numerical experiments. Also, managerial insights can be obtained to provide decision support for running an efficient sustainable-flexible logistics system by using a Chinese 4PL firm's real data. [ABSTRACT FROM AUTHOR]

Due to the intensified environmental protection consciousness of enterprises and consumers, the green winner determination (GWD) considering environmental performance becomes very important for the 4PL transportation service procurement. In this paper, a new GWD method is studied, which considers different types of attributes including those related to environmental performance and the consensus reaching process (CRP). To characterize multiple types of attributes, linguistic terms, interval numbers, and crisp numbers are combined. To achieve an acceptable consensus level among linguistic evaluations given by different experts, a minimum adjustment consensus model is constructed. And on this basis, an interactive CRP is proposed. Integrating the heterogeneous information addressing process and the CRP, a HC-VIKOR method is developed to promote the 4PL's operational efficiency and service quality. Further, a numerical example is designed to demonstrate the effectiveness of the proposed method. Sensitivity analysis reveals that both the acceptable consensus threshold and the weight of group utility have a significant influence on the winner determination result. Comparison analysis shows that the proposed method outperforms the existing methods. Our study not only extends the traditional winner determination but also provides decision support for the 4PL to provide transportation services efficiently. [ABSTRACT FROM AUTHOR]

Due to the increasingly competitive nature of the global market, the capability of controlling delivery time is becoming a significant advantage for enterprises. A novel fourth-party logistics (4PL) network design problem with the objective of minimizing the overall cost under service time constraint and stochastic demand is proposed in the paper. To address this problem, a two-stage nonlinear stochastic programming model is proposed. The topological structure of the 4PL network is decided in the first stage, while the network flows are determined in the second stage. By using auxiliary variables to linearize the service time constraint and by adopting the sample average approximation (SAA) method to handle the stochastic demand, the two-stage nonlinear stochastic programming model is transformed into a mixed integer linear programming (MILP) model. To overcome the difficulties of solving the MILP model caused by a large number of demand scenarios and integer-valued decision variables, a variable separation (VS) strategy is presented to improve the dual decomposition and Lagrangian relaxation (DDLR) approach to propose a VSDDLR-SAA algorithm. Results of the numerical examples and a real-life case illustrate the effectiveness of the proposed model and VSDDLR-SAA algorithm. Comparison analysis of the 4PL network and the supply chain network shows that 4PL can deliver products within the prescribed time at a lower cost by cooperating with third-party logistics providers. [ABSTRACT FROM AUTHOR]

This paper considers decisions of bidders with bounded rationality in different thinking levels for a first-price sealed-bid reverse auction. To characterize the nonequilibrium strategic thinking, we construct a mathematical model that incorporates the "level-k decision rule" to iteratively derive closed-form solutions. Then the effects of bidders' heterogeneous beliefs of thinking levels on their bid prices and expected payoffs are investigated. We find that under some assumptions, bidders will exhibit oscillating behavior in their bid prices and expected profits in terms of thinking levels. When the thinking level tends to infinity, the bid prices and expected profits converge to those in the conventional analysis with perfectly rational bidders. An interesting finding from theoretical analysis verified by numerical experiments is that any bidder with a thinking level above two should bid according to level-2 bidder's strategy to achieve the highest expected profit, and in this case the buyer will pay no more than level-2 bidder's bid price. [ABSTRACT FROM AUTHOR]

Suppliers may experience emotional/behavioral consequences of anticipated regrets that consist of winner and loser regrets in first- and second-price sealed-bid reverse auctions. Constructing mathematical models that incorporate regret theory to derive closed-form solutions of regret-anticipated suppliers’ bid decisions, this paper theoretically examines the effects of anticipated regrets on suppliers’ bid prices, buyer’s expected procurement cost and auction format decision. Comparing with the no regret scenario, we find that winner regret has adverse effects on the buyer’s expected procurement cost in first-price sealed-bid reverse auctions with regret-anticipated suppliers. To mitigate the adverse effects, we propose using the reserve price strategy for the buyer with theoretical analysis and numerical supports. An interesting analysis reveals that as the number of suppliers increases, the optimal reserve price increases or decreases depending on the degree of winner regret is lower or higher than that of loser regret. Also, the classical revenue equivalence theorem no longer holds when the degree of winner regret differs from that of loser regret. [ABSTRACT FROM AUTHOR]

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