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The traveling purchaser problem with stochastic prices: Exact and approximate algorithms

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  • Kang, Seungmo
  • Ouyang, Yanfeng

Abstract

The paper formulates an extension of the traveling purchaser problem where multiple types of commodities are sold at spatially distributed locations with stochastic prices (each following a known probability distribution). A purchaser's goal is to find the optimal routing and purchasing strategies that minimize the expected total travel and purchasing costs needed to purchase one unit of each commodity. The purchaser reveals the actual commodity price at a seller upon arrival, and then either purchases the commodity at the offered price, or rejects the price and visits a next seller. In this paper, we propose an exact solution algorithm based on dynamic programming, an iterative approximate algorithm that yields bounds for the minimum total expected cost, and a greedy heuristic for fast solutions to large-scale applications. We analyze the characteristics of the problem and test the computational performance of the proposed algorithms. The numerical results show that the approximate and heuristic algorithms yield near-optimum strategies and very good estimates of the minimum total cost.

Suggested Citation

  • Kang, Seungmo & Ouyang, Yanfeng, 2011. "The traveling purchaser problem with stochastic prices: Exact and approximate algorithms," European Journal of Operational Research, Elsevier, vol. 209(3), pages 265-272, March.
    • Handle: RePEc:eee:ejores:v:209:y:2011:i:3:p:265-272
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    References listed on IDEAS

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    Cited by:

    1. Zahra Sadat Hasanpour Jesri & Kourosh Eshghi & Majid Rafiee & Tom Van Woensel, 2022. "The Multi-Depot Traveling Purchaser Problem with Shared Resources," Sustainability, MDPI, vol. 14(16), pages 1-26, August.
    2. Palomo-Martínez, Pamela J. & Salazar-Aguilar, M. Angélica, 2019. "The bi-objective traveling purchaser problem with deliveries," European Journal of Operational Research, Elsevier, vol. 273(2), pages 608-622.
    3. Manerba, Daniele & Mansini, Renata & Riera-Ledesma, Jorge, 2017. "The Traveling Purchaser Problem and its variants," European Journal of Operational Research, Elsevier, vol. 259(1), pages 1-18.
    4. Mingyu Xiao & Jianan Zhang & Weibo Lin, 0. "Parameterized algorithms and complexity for the traveling purchaser problem and its variants," Journal of Combinatorial Optimization, Springer, vol. 0, pages 1-17.
    5. Mingyu Xiao & Jianan Zhang & Weibo Lin, 2022. "Parameterized algorithms and complexity for the traveling purchaser problem and its variants," Journal of Combinatorial Optimization, Springer, vol. 44(4), pages 2269-2285, November.
    6. Taesung Hwang & Yanfeng Ouyang, 2015. "Urban Freight Truck Routing under Stochastic Congestion and Emission Considerations," Sustainability, MDPI, vol. 7(6), pages 1-16, May.

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