Heuristic methods for the periodic Shipper Lane Selection Problem in transportation auctions

•Shipper Lane Selection Problem in transportation procurement auctions.•Periodicity condition in the integer programming formulation.•Heuristics based on the decomposition approach to solve large-scale problems.•Extensive experimental analysis on benchmark test problems.•Comparison with the state-of-the-art models and sensitivity analysis.

In the Shipper Lane Selection Problem (SLSP) a set of lanes should be classified either to be serviced by the shipper's fleet or through auction. However, it is common in real-life problems that the same lane should be served multiple times during the planning horizon. In this study, the periodicity nature of the problem is incorporated into the SLSP. Thus, a novel variant of the problem, namely the Periodic SLSP (P-SLSP) is introduced. The aim is to achieve savings on the shipper transportation costs over the extended horizon. The problem is modeled as an integer programming formulation and solved first with a general purpose software. Subsequently, three different heuristic methods have been developed to overcome the limitation of the exact full-space method. The validity of the model as well as the efficiency of the heuristics have been tested by using a properly modified set of Solomon's benchmark problems. Intensive computational analysis indicates the appropriateness of the proposed heuristics and their relevance for solving large-scale P-SLSPs.