A Robust Optimization for United States Department of Agriculture Food Aid Bid Allocations

Document Type

Article

Publication Date

10-2015

Publication Title

Transportation Research Part E: Logistics and Transportation Review

DOI

10.1016/j.tre.2015.08.001

ISSN

1366-5545

Abstract

The U.S. Department of Agriculture (USDA) currently uses a bidding system to determine carriers and suppliers that would partner in providing food aid annually in response to global emergencies and famine. We mimic the USDA approach via a robust optimization model featuring box and ellipsoid uncertainty frameworks to account for uncertainties in demand, supplier and carrier bid prices. Through a case study utilizing historical invoice data, we demonstrate our model applicability in improving ocean carrier and food supplier bid pricing strategy and similar supply chain network optimization problems. Through a validation algorithm we demonstrate the value of our robust models.

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