Robust Optimization for United States Department of Agriculture Food Aid Bid Allocations
Department
Economics, Finance and Quantitative Analysis
Document Type
Article
Publication Date
10-1-2015
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.
Journal Title
Transportation Research Part E: Logistics and Transportation Review
Journal ISSN
1366-5545
Volume
82
First Page
129
Last Page
146
Digital Object Identifier (DOI)
10.1016/j.tre.2015.08.001
