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Peer-to-peer transportation platforms dynamically match requests (e.g., a ride, a delivery) to independent suppliers who are not employed nor controlled by the platform. Thus, the platform cannot be certain that a supplier will accept an offered request. To mitigate this selection uncertainty, a platform can offer each supplier a menu of requests to choose from. Such menus need to be created carefully because there is a trade-off between selection probability and duplicate selections. In addition to a complex decision space, supplier selection decisions are vast and have systematic implications, impacting the platform’s revenue, other suppliers’ experiences (in the form of duplicate selections), and the request waiting times. Thus, we present a multiple scenario approach, repeatedly sampling potential supplier selections, solving the corresponding two-stage decision problems, and combining the multiple different solutions through a consensus algorithm. Extensive computational results using the Chicago Region as a case study illustrate that our method outperforms a set of benchmark policies. We quantify the value of anticipating supplier selection, offering menus to suppliers, offering requests to multiple suppliers at once, and holistically generating menus with the entire system in mind. Our method leads to more balanced assignments by sacrificing some “easy wins” toward better system performance over time and for all stakeholders involved, including increased revenue for the platform, and decreased match waiting times for suppliers and requests.
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Online acceptance probability approximation in peer-to-peer transportation
Crowdsourced transportation by independent suppliers (or drivers) is central to urban delivery and mobility platforms. While utilizing crowdsourced resources has several advantages, it comes with the challenge that suppliers are not bound to assignments made by the platforms. In practice, suppliers often decline offered service requests, e.g., due to the required travel detour, the expected tip, or the area a request is located. This leads to inconveniences for the platform (ineffective assignments), the corresponding customer (delayed service), and also the suppliers themselves (non-fitting assignment, less revenue). Therefore, the objective of this work is to analyze the impact of a platform approximating and incorporating individual suppliers’ acceptance behavior into the order dispatching process and to quantify its impact on all stakeholders (platform, customers, suppliers). To this end, we propose a dynamic matching problem where suppliers’ acceptances or rejections of offers are uncertain. Suppliers who accept an offered request are assigned and reenter the system after service looking for another offer. Suppliers declining an offer stay idle to wait for another offer, but leave after a limited time if no acceptable offer is made. Every supplier decision reveals only their acceptance or rejection information to the platform, and in this paper, we present a corresponding mathematical model and an approximation method that translates supplier responses into updated approximations of the likelihood of a specific supplier to accept a specific future offer and use this information to optimize subsequent offering decisions. We show via a computational study based on crowdsourced food delivery that online approximation and incorporating individual supplier acceptance estimates into order dispatching leads to overall more successful assignments, more revenue for the platform and most of the suppliers, and less waiting for the customers to be served. We also show that considering individual supplier behavior can lead to unfair treatment of more agreeable suppliers.
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- Award ID(s):
- 1751801
- PAR ID:
- 10523451
- Publisher / Repository:
- OMEGA
- Date Published:
- Journal Name:
- Omega
- Volume:
- 123
- Issue:
- C
- ISSN:
- 0305-0483
- Page Range / eLocation ID:
- 102993
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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Abstract This article formulates and solves a stochastic optimization model to investigate the impact of crowdsourced platforms (e.g., ridesharing, on‐demand delivery, volunteer food rescue, and carpooling) offering small, personalized menus of requests and incentive offers for drivers to choose from. To circumvent nonlinear variable relationships, we exploit model structure to formulate the program as a stochastic linear integer program. The proposed solution approach models stochastic responses as a sample of variable and fixed scenarios, and to counterbalance solution overfitting, uses a participation ratio parameter. The problem is also decomposed and iterated among two separate subproblems, one which optimizes menus, and another, which optimizes incentives. Computational experiments, based on a ride sharing application using occasional drivers demonstrate the importance of using multiple scenarios to capture stochastic driver behavior. Our method provides robust performance even when discrepancies between predicted and observed driver behaviors exist. Computational results show that offering menus and personalized incentives can significantly increase match rates and platform profit compared to recommending a single request to each driver. Further, compared to the menu‐only model, the average driver income is increased, and more customer requests are matched. By strategically using personalized incentives to prioritize promising matches and to increase drivers' willingness to accept requests, our approach benefits both drivers and customers. Higher incentives are offered when drivers are more likely to accept, while fewer incentives and menu slots are reserved for driver‐request pairs less likely to be accepted.more » « less
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null (Ed.)Suppliers registered within a manufacturing-as-a-service (MaaS) marketplace require near real time decision making to accept or reject orders received on the platform. Myopic decision-making such as a first come, first serve method in this dynamic and stochastic environment can lead to suboptimal revenue generation. In this paper, this sequential decision making problem is formulated as a Markov Decision Process and solved using deep reinforcement learning (DRL). Empirical simulations demonstrate that DRL has considerably better performance compared to four baselines. This early work demonstrates a learning approach for near real-time decision making for suppliers participating in a MaaS marketplace.more » « less
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The initial months of the COVID-19 pandemic were marked by widespread shortages of personal protective equipment (PPE) because of surging demand and a fragile global supply chain. In response, many domestic suppliers pivoted to producing PPE, such as masks and face shields, made possible by low material costs and simple designs. A key challenge that remained was the lack of an established marketplace for nontraditional suppliers of PPE to connect with healthcare facilities in need. To address this inefficiency, we launched an online platform, Shield-Net, to match requests for face shields with new suppliers of PPE. Our platform was based on an optimization model that produced supplier-requester pairs and took into account request urgency, request size, production capacity, location, and product type. During the period of March to September 2020, Shield-Net produced 390 matches, resulting in the shipment of more than 50,000 face shields to 68 unique requesting organizations. Supplier-requester proximity was found to be the only statistically significant variable in the success of a match. In this paper, we discuss the development and impact of our matching platform, as well as lessons learned during its operation. History: This paper was refereed. This article has been selected for inclusion in the Special Issue on Analytics Remedies to COVID-19. Funding: This work was supported by the National Science Foundation [Grant CMMI-2029072].more » « less
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Problem definition: We consider network revenue management problems with flexible products. We have a network of resources with limited capacities. To each customer arriving into the system, we offer an assortment of products. The customer chooses a product within the offered assortment or decides to leave without a purchase. The products are flexible in the sense that there are multiple possible combinations of resources that we can use to serve a customer with a purchase for a particular product. We refer to each such combination of resources as a route. The service provider chooses the route to serve a customer with a purchase for a particular product. Such flexible products occur, for example, when customers book at-home cleaning services but leave the timing of service to the company that provides the service. Our goal is to find a policy to decide which assortment of products to offer to each customer to maximize the total expected revenue, making sure that there are always feasible route assignments for the customers with purchased products. Methodology/results: We start by considering the case in which we make the route assignments at the end of the selling horizon. The dynamic programming formulation of the problem is significantly different from its analogue without flexible products as the state variable keeps track of the number of purchases for each product rather than the remaining capacity of each resource. Letting L be the maximum number of resources in a route, we give a policy that obtains at least [Formula: see text] fraction of the optimal total expected revenue. We extend our policy to the case in which we make the route assignments periodically over the selling horizon. Managerial implications: To our knowledge, the policy that we develop is the first with a performance guarantee under flexible products. Thus, our work constructs policies that can be implemented in practice under flexible products, also providing performance guarantees. Funding: The work of H. Topaloglu was partly funded by the National Science Foundation [Grant CMMI-1825406]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0583 .more » « less
- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1016/j.omega.2023.102993
