The price of anarchy in competitive reverse supply chains with quality-dependent price-only contracts

To quantify the efficiency of decentralized competitive reverse supply chains (RSCs) with quality-dependent price-only contracts, we characterize the worst-case efficiency loss with the price of anarchy (PoA). Several scenarios with unilateral or bilateral horizontal competition under push or pull configurations of RSCs are discussed. Given the uncertainty in the returns of used products, we consider different consumers’ return behaviors and investigate the effect of the quality levels of used products. We clarify the effect of horizontal competition for each scenario and find distinctive features of RSCs that differentiate them from traditional forward activities. Additional managerial insights are provided for discussion.     

Congestion tolls and parking fees: A comparison of the potential effect on travel behavior

This paper presents a comparison of attitudes towards congestion and parking tolls and explores their effect on travel behavior. The findings indicate that drivers are sensitive mainly to congestion tolls and are willing to change their travel habits to avoid these tolls. The major effect of a congestion toll is the shifting of the time of the journey. High levels of demand elasticity (−1.8 for congestion tolls and −1.2 for parking fees) were found. The readiness to pay parking fees is greater; thus, the effectiveness of congestion tolls in reducing demand is higher during the times the tolls apply.     

Modelling and evaluation of road pricing in Paris

This article describes the impacts of road pricing in Ile-de-France, a region that includes Paris. The morning peak is studied using METROPOLIS: a dynamic network simulator that treats endogenously travellers' mode, departure time and route-choice decisions. Time-independent tolls on selected links, time-varying cordon tolls, and a network-wide toll proportional to travel time are considered. Welfare gains from the link and cordon tolls are relatively small. The comprehensive travel-time-based toll yields much higher benefits. In all cases, benefits to users amount to a large fraction of toll revenues and exceed the monetised value of reductions in noise, accidents and vehicle emissions.     

The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial

A full-scale road pricing trial will be performed in Stockholm for 7 months in 2006. The road tolls are bundled with major improvements of public transport. The trial will be followed by a local referendum. We conduct numerical simulations with a model of modal choice to estimate the welfare effects of road tolls on commuters crossing the toll zone. We find that in the absence of revenue recycling, few commuters gain from the road-toll reform. However, the fraction of gainers rises considerably when public transport is improved as planned in Stockholm.     

Bounding the inefficiency of atomic splittable selfish traffic equilibria with elastic demands

We determine the exact upper bound of the inefficiency of atomic splittable selfish traffic equilibria with elastic travel demand with and without road pricing. In the previous results, only pseudo-approximation bound were obtained for this case. By comparison, we also conclude that the traffic equilibrium with elastic demand may be worse than the corresponding fixed demand case, which implying that the demands’ elastic can have a negative effect on the quality of equilibrium solutions. Finally, we propose a road pricing mechanism. We prove that there are optimal tolls in general network, atomic players and elastic travel demand setting.     

Flat versus spatially variable tolling: A case study in Fresno,California

A number of studies have examined the feasibility of temporal variations in tolls. However, spatial variation in tolls has not received much attention, especially in practice. Spatial variation could effectively reduce congestion and increase profits. To fill this gap, we conduct an empirical application on 3 different road segments using the Fresno, California's transportation planning model. Our modeling results in a number of interesting insights. First, the derived optimal flat toll values are very close to the average variable tolls, but the effects of applying spatially variable tolls on improving total revenues (from 4% to 24%) and total improved travel time (from 18% to 1083%) measures are significant. Second, spatially variable tolls are more effective, but more costly, particularly for arterials, which can be attributed to the higher number of access points for arterials. Third, spatial variations in tolls are more effective for peak hours than for off-peak hours and for social optimization than for profit maximization. Fourth, to improve throughputs for both profit maximization and social optimization, the prevalent tolling pattern along a corridor induces lower final volumes per capacity (V/Cs) (after pricing) at the mainline flow sections and relatively higher final V/Cs at the entrance and exit (boundary) points. Finally, optimal toll patterns are not dependent on vehicle miles traveled (VMTs) or volumes but, rather, are related to targeted V/Cs. Therefore, flow-dependent charges along a corridor should be based on V/Cs rather than on volumes or VMTs.     

An origin–destination based road pricing model for static and multi-period traffic assignment problems

To mitigate traffic externalities, we propose an origin–destination (OD) based road pricing model for traffic assignment problems. For elastic demand, we derive explicit optimal tolls for the OD-based pricing scheme. We also extend the model to a multi-period static traffic assignment (MSTA) where we derive analytically the route and OD-dependent tolls based on equilibrium conditions. We present some examples to show that the OD-based tolling scheme could improve the system welfare significantly, compared to the no-toll scenario (user equilibrium – UE).     

The congested multicommodity network design problem

This paper studies a version of the fixed-charge multicommodity network design problem where in addition to the traditional costs of flow and design, congestion at nodes is explicitly considered. The problem is initially modeled as a nonlinear integer programming formulation and two solution approaches are proposed: (i) a reformulation of the problem as a mixed integer second order cone program to optimally solve the problem for small to medium scale problem instances, and (ii) an evolutionary algorithm using elements of iterated local search and scatter search to provide upper bounds. Extensive computational results on new benchmark problem instances and on real case data are presented.     

Optimal distance tolls under congestion pricing and continuously distributed value of time

This paper addresses the optimal distance-based toll design problem for cordon-based congestion pricing schemes. The optimal distance tolls are determined by a positive and non-decreasing toll-charge function with respect to the travel distance. Each feasible toll-charge function is evaluated by a probit-based SUE (Stochastic User Equilibrium) problem with elastic demand, asymmetric link travel time functions, and continuously distributed VOT, solved by a convergent Cost Averaging (CA) method. The toll design problem is formulated as a mixed-integer mathematical programming with equilibrium constraints (MPEC) model, which is solved by a Hybrid GA (Genetic Algorithm)–CA method. Finally, the proposed models and algorithms are assessed by two numerical examples.     

Combinatorial clock-proxy exchange for carrier collaboration in less than truck load transportation

A carrier collaboration problem in less-than-truck load transportation is considered, where multiple carriers exchange their pickup and delivery requests in order to improve their operational efficiency. We extend the clock-proxy auction proposed by Ausubel et al. (2006) to a combinatorial clock-proxy exchange for the problem. This mechanism combines the price discovery of the clock exchange designed based on Lagrangian relaxation with the efficiency of the proxy exchange determined based on the information observed in the clock phase. Numerical experiments on randomly generated instances demonstrate the necessity of the proxy phase and the effectiveness of the clock-proxy exchange.     

Toll financing in Norway: The success,the failures and perspectives for the future

Public funds for road investments have been subjected to constraints in many countries over the past three decades. Many governments have therefore resorted to financing road infrastructure using tolls. This article investigates what the future may offer with respect to toll financing in Norway. The changing environment in which transport planning takes place requires adaptations such as transforming tolls into congestion pricing schemes. Lessons from Norway may be useful for decision makers in Europe and elsewhere who are concerned with toll financing.     

Concurrent design of product family and supply chain network considering quality and price

We study the problem of concurrent design of a product family and its supply chain (SC) network. Inspired by a real-life case in computer industry, the impact of quality and price in SC demand is investigated. Two different models are proposed, the former maximizes the company’s profit with respect to customers’ priorities on quality and price; the latter is a bi-objective programming, which consider two extreme customer groups: for one group quality has the highest priority and for the other price; the intermediate groups falls between these two. The performance of the models is analyzed through a case problem.     

Discrete choice models of traveler participation in differential time of day pricing programs

Tolls that vary based on time of day or congestion are gaining attention around the world as a potential travel demand management strategy that can shift peak period travel to off peak periods thereby contributing to peak period congestion relief. However, despite the widespread interest in the concept, there is very little empirical data available on the impacts of variable tolls on traveler choices and disaggregate models that can be used to predict traveler response to variable pricing are few. This paper reports on results from two bridges with differential time of day tolls in the Lee County area of Florida in the United States. Using travel survey data collected at these two bridges, discrete choice models of traveler response to the variable toll rates are estimated. The models indicate that travelers who are retired, have a low income, have flextime at their place of employment, or have a flexible travel schedule are more likely to alter their time of travel with greater frequency due to the variable toll.     

A Linear Programming approach for robust network revenue management in the airline industry

The classical revenue management problem consists of allocating a fixed network capacity to different customer classes, so as to maximize revenue. This area has been widely applied in service industries that are characterized by a fixed perishable capacity, such as airlines, cruises, hotels, etc.It is traditionally assumed that demand is uncertain, but can be characterized as a stochastic process (See Talluri and van Ryzin (2005) for a review of the revenue management models). In practice, however, airlines have limited demand information and are unable to fully characterize demand stochastic processes. Robust optimization methods have been proposed to overcome this modeling challenge. Under robust optimization framework, demand is only assumed to lie within a polyhedral uncertainty set (Lan et al. (2008); Perakis and Roels (2010)).In this paper, we consider the multi-fare, network revenue management problem for the case demand information is limited (i.e. the only information available is lower/upper bounds on demand). Under this interval uncertainty, we characterize the robust optimal booking limit policy by use of minimax regret criterion. We present an LP (Linear Programming) solvable mathematical program for the maximum regret so our model is able to solve large-scale problems for practical use. A genetic algorithm is proposed to find the booking limit control to minimize the maximum regret. We provide computational experiments and compare our methods to existing ones. The results demonstrate the effectiveness of our robust approach.     

Price planning for time-definite less-than-truckload freight services

Price planning simultaneous determines the service demand (with associated prices) and an operational plan to maximize a carrier’s profit. We modeled this integral-constrained concave program in the link formulation and proposed an implicit enumeration embedded with Lagrangian Relaxation upper bounds to determine the optimal prices. Computations on Taiwan’s time-definite less-than-truckload freight market showed that the carrier needs to simultaneously re-evaluate its network capacity while determining prices. The common practice of distance-based pricing that sets price by a base rate over direct shipment distance underestimates operating cost, specifically operating losses for short distance shipments.     

Regulation in the air: price-and-frequency caps

In spite of deregulation on the air-transportation markets, many connections are still operated by a single operator on regional markets, in particular in Europe. Evidence thus calls for some regulation in this industry. There is, however, a great concern for the (possibly negative) consequences of price regulation on the quality of services. We argue that both aspects should be considered jointly and propose a mechanism for the decentralization of the optimal structure of services. The regulatory procedure is based on the sole book-keeping data and requires the regulator to use only an estimate of travellers’ average value of time.     

How large is the gap between present and efficient transport prices in Europe?

In this paper, we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external cost.     

Measuring regional differences in users' perceptions towards interurban toll roads

Public acceptability is crucial to achieve the successful implementation of certain policy initiatives. In the transport sector, this is especially relevant for toll roads since they entail a burden to the users. Previous literature in this field has mainly focused on analyzing the influence of different individual characteristics on attitudes towards road charges, without clear results. However, other context-specific drivers such as regional parameters may also play an important role to explain users' attitudes, especially when the implementation of tolls within the same nation varies throughout regions. The goal of this paper is to analyze regional differences in users' perceptions with regard to tolls as an appropriate way to finance the provision of road infrastructure. Based on a nationwide survey conducted to road users in interurban toll roads in Spain, we develop a multilevel logit model to explore regional differences in drivers' perceptions. The research concludes that differences identified seem to be more influenced by context-specific variables, related to either the characteristics of the toll road or the region, than by the characteristics of the individuals. The paper also underlines the negative effects of an asymmetrical distribution of toll roads across regions on users' perceptions, since those territories especially suffering the burden of tolls show a more negative attitude towards road charging.     

Price promotion with reference price effects in supply chain

We consider the price promotion in a supply chain comprising one manufacturer and one retailer, who take into account the reference price effects of consumers. The problem is analyzed as a manufacturer-lead Stackelberg game. The results indicate that reference price effects could mitigate “double marginalization” effects, and improve the channel efficiency. We also show that the optimal price promotion benefits the manufacturer, retailer and consumers in consumer promotion model. Furthermore, we provide the conditions under which the retailer has an interest in offering price promotion to consumers. Finally, we employ numerical analysis to demonstrate more managerial insights.     

A Generalized Nash Equilibrium network model for post-disaster humanitarian relief

We develop a Generalized Nash Equilibrium network model for post-disaster humanitarian relief by nongovernmental organizations (NGOs). NGOs derive utility from providing relief supplies to victims of the disaster at demand points in a supply chain context while competing with each other for financial funds provided by donations. The shared constraints consist of lower and upper bounds for demand for relief items at the demand points to reduce materiel convergence or congestion. This game theory problem is reformulated as an optimization problem and numerical examples and a theoretical case study on Hurricane Katrina given.