A Robust Optimization for United States Department of Agriculture Food Aid Bid Allocations
Transportation Research Part E: Logistics and Transportation Review
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.
Paul, Jomon A., Xinfang Wang.
"A Robust Optimization for United States Department of Agriculture Food Aid Bid Allocations."
Transportation Research Part E: Logistics and Transportation Review, 82: 129-146.