Optimal lot-sizing and service level weighting in sequential multi-attribute global transportation service procurement

•Exporters should pay more attention to the quality of service when choosing freight forwarders to improve the utility.•The proposed auction system could effectively accommodate strategic forwarders with learning abilities.•There is a marginal diminishing effect that the benefits from additional par...

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Bibliographic Details
Published in:European journal of operational research Vol. 327; no. 3; pp. 1052 - 1072
Main Authors: Kong, Xiang T.R., He, Zhan, Yu, Kaize, Yan, Pengyu
Format: Journal Article
Language:English
Published: Elsevier B.V 16.12.2025
Subjects:
Global transportation service procurement
Markov decision process
Multi-attribute auction
Multi-cycle sequential decision model
Reinforcement learning algorithm
Global transportation service procurement
Multi-cycle sequential decision model
Markov decision process
Multi-attribute auction
Reinforcement learning algorithm
ISSN:0377-2217
Online Access:Get full text
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Summary:•Exporters should pay more attention to the quality of service when choosing freight forwarders to improve the utility.•The proposed auction system could effectively accommodate strategic forwarders with learning abilities.•There is a marginal diminishing effect that the benefits from additional participation of learning-oriented bidders.•The strategic auction participation of learning-oriented freight forwarders smooths the capacity supply trend.•Significant performance improvement can be gained from optimal setting of the total auction cycle and the total supply. The development of on-demand global transportation service procurement (oGTSP) through digital trading platforms has accelerated due to frequent fluctuations in transport capacity. In the oGTSP model, the exporter must consider logistics service quality and transport prices when sourcing global logistics services. To satisfy the continuous transport needs, procurement is conducted sequentially throughout multiple auction cycles. For a single auction, we constructed a service-level weight-scoring function and analysed the trading parties’ behavioural strategies to obtain an auction equilibrium strategy in a specific context. Then, we developed a multi-cycle sequential decision method based on a single-cycle equilibrium decision by forwarders that can dynamically adjust the auction lot size to help the exporter obtain optimal utility. Finally, based on the real case of a large electronic product exporter, the proposed approach was verified. The results demonstrated that exporters should pay more attention to the quality of service when choosing freight forwarders to improve the utility of transportation service procurement. The exporter can attract more forwarders to participate in auctions to obtain more capacity supply by increasing the weighting of service levels. Besides, the proposed auction system could effectively accommodate strategic forwarders with learning abilities. The exporter’s utility will significantly improve if the freight forwarders have learning ability. There is a marginal diminishing effect in that the benefits from additional participation of learning-oriented bidders are initially large but eventually stabilized. The strategic auction participation of learning-oriented freight forwarders smooths the capacity supply trend, reduces extreme fluctuations and makes multi-cycle predictions more accurate.
ISSN:0377-2217
DOI:10.1016/j.ejor.2025.05.037