On Combinatorial Optimization and

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Container Ports Sebastian Meiswinkel
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Produktion und Logistik

Sebastian Meiswinkel

On Combinatorial
Optimization and
Mechanism Design
Problems Arising
at Container Ports
Produktion und Logistik

Reihe herausgegeben von

B. Fleischmann, Augsburg, Deutschland
M. Grunow, München, Deutschland
S. Helber, Hannover, Deutschland
K. Inderfurth, Magdeburg, Deutschland
H. Kopfer, Bremen, Deutschland
H. Meyr, Stuttgart, Deutschland
T. S. Spengler, Braunschweig, Deutschland
H. Stadtler, Hamburg, Deutschland
H. Tempelmeier, Köln, Deutschland
G. Wäscher, Magdeburg, Deutschland
C. Bierwirth, Halle, Deutschland
K. Schimmelpfeng, Stuttgart, Deutschland
M. Fleischmann, Mannheim, Deutschland
H.-O. Günther, Berlin, Deutschland
Diese Reihe dient der Veröffentlichung neuer Forschungsergebnisse auf den ­Gebie-
ten der Produktion und Logistik. Aufgenommen werden vor allem ­herausragende
Habilitationsschriften. Die Publikatio-
quantitativ orientierte Dissertationen und ­
nen vermitteln innovative Beiträge zur Lösung praktischer Anwendungsprobleme
der Produktion und Logistik unter Einsatz quantitativer Methoden und moderner
Informationstechnologie.

Kontakt
Professor Dr. Thomas S. Spengler
Technische Universität Braunschweig ­
Institut für Automobilwirtschaft
und Industrielle Produktion
Mühlenpfordtstraße 23
38106 Braunschweig

Weitere Bände in der Reihe http://www.springer.com/series/12449

Sebastian Meiswinkel

On Combinatorial
Optimization and
Mechanism Design
Problems Arising at
Container Ports
With a foreword by Prof. Dr. Erwin Pesch
Sebastian Meiswinkel
Siegen, Germany

Dissertation University of Siegen, 2017

Produktion und Logistik

ISBN 978-3-658-22361-8 ISBN 978-3-658-22362-5 (eBook)
https://doi.org/10.1007/978-3-658-22362-5

Library of Congress Control Number: 2018944272

Springer Gabler
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2018
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Foreword

Globalisation and the internet are main driving forces for the rapid increase of freight
transport over the past years, and its growth is predicted to continue in the same rate for
the next decade or more amongst others due to China’s One Belt One Road (or New Silk
Road) initiative, that is intended to intensify the trade between Europe and Asia along
the former silk road.
Intermodal transport is mostly the transport of containers in one supply chain in
more than one transport mode, e.g, by rail, road or sea. While the long distances are
covered by huge container vessels that periodically operate between sea ports, or by
intercontinental trains, trucks are operating on the so called last mile between customers
and a rail transshipment terminal or a sea port in order to deliver or pick-up the freight.
Transshipment yards and container ports are main points where the transportation
mode of goods can be changed. Since rail and roads are operating at their capacity
limits, an acceleration of freight transport requires faster processes in order to improve
the efficiency of cargo handling at container terminals and to cope with the increasing
shipping volume.
In this book “On Combinatorial Optimization and Mechanism Design Problems Aris-
ing at Container Ports” the author concentrates exactly on that, analysing different trans-
portation problems arising at container terminals from a quantitative point of view.
In the first part, the author discusses situations where an operator of a container
terminal serves clients who can be assumed to behave selfish. If the operator of a container
terminal requires private information from the clients for a socially optimal decision,
it is necessary to provide an incentive or mechanism that all clients commit their true
information and do not try to influence the outcome by false information. Algorithmic
mechanism design is a research area that deals with the construction of these methods to
make the clients to be truthful. The author made a major contribution to this field by
improving the understanding of truthfulness in case of specific scheduling problems.
The second part of this book deals with real world optimization problems without
any private information that appear at container ports. Efficient handling of the internal
vi Foreword

processes is important for the terminal being competitive, since many terminals are under
high competitive pressure and therefore need to optimize their processes.
This book should be most suitable to researchers and students of logistics and oper-
ations research. In addition, the contents of this book might be very interesting to those
in industry who need to solve problems on the design, operation, and management of
container ports.

Prof. Dr. Erwin Pesch

Preface

This thesis represents the result of my PhD study at the Chair of Management Information
Science at the University of Siegen. This time has been a challenging and long journey,
but I was fortunate enough to be accompanied by many people. I thank all of them,
particularly the ones below.
First, I would like to express my great gratitude to my supervisor Prof. Dr. Erwin
Pesch. He offered me the opportunity to work at the Chair of Management Information
Science and to conduct my PhD research. He was very open-minded in his supervision
and I enjoyed very much the freedom he gave me to pursue the research direction I
like. Throughout my study, he continuously supported me with his broad knowledge in
the fields of logistics and operations research. His professional comments and invaluable
advices have helped me improve the scientific quality of this thesis.
I would also like to thank Prof. Dr. Rob van Stee for serving as the second referee of
my thesis and PD Dr. Sergei Chubanov for being member of the doctoral committee.
My great gratitude goes also to Dr. Dominik Kreß who shares an office with me. The
considerable discussions we had and the constructive suggestions he made on my work
were very helpful. I would also like to thank Dr. Alena Otto for proofreading important
parts of my thesis.
I am thankful to my colleagues David Müller, Xiyu Li and Roswitha Eifler for sup-
porting me and for participating in my defense. My appreciation also goes to my former
colleagues Dr. Jenny Nossack.
Last but not least, I would like to express my gratitude to my family and friends and
especially to my wife Anja for the strong support they have given me during the time I
have been working on this thesis.

Siegen, March 2018 Sebastian Meiswinkel

Contents

List of Figures xiii

List of Tables xv

1 Introduction and Preliminaries 1

1.1 Notation and Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.1 Machine Scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.2 Mechanism Design . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.3 Graph Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2 Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2 Mechanism Design and Machine Scheduling: Literature Review 15

2.1 Scope of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.2 Review of Problem Categories and Features . . . . . . . . . . . . . . . . . 16
2.2.1 Categories, Risk Attitude and Private Information of Agents . . . . 17
2.2.2 Models of Execution and Constraints on Committed Data . . . . . 17
2.2.3 Characteristics of Payment Schemes . . . . . . . . . . . . . . . . . . 18
2.2.4 Other Problem Categories and Features . . . . . . . . . . . . . . . . 19
2.3 Classification Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3.1 Review of Selected Elements of Graham et al. (1979) . . . . . . . . 19
2.3.2 Including Mechanism Design Settings for Machine Scheduling Prob-
lems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3.3 Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.4 Literature Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.5 Research Challenges and Conclusion . . . . . . . . . . . . . . . . . . . . . 29
x Contents

3 Truthful Algorithms for Job Agents 31

3.1 Related Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2 One-Parameter Job Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2.1 Problem Setting and Preliminaries . . . . . . . . . . . . . . . . . . 33
3.2.2 Monotonicity and List-Scheduling Algorithms . . . . . . . . . . . . 34
3.2.3 Multiple Parallel Machines . . . . . . . . . . . . . . . . . . . . . . . 36
3.2.4 One Machine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.3 Two-Parameter Job Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.3.1 Problem Setting and Preliminaries . . . . . . . . . . . . . . . . . . 40
P
3.3.2 Incentive Compatible Mechanisms for P |priv{wj , dj }, Uj | wj Uj . 43
3.3.3 Applying Our Results to an Example Algorithm for
P
1|priv{wj , dj }, Uj | wj Uj . . . . . . . . . . . . . . . . . . . . . . . 51
3.4 Conclusion and Future Research . . . . . . . . . . . . . . . . . . . . . . . . 55

4 The Partitioning Min-Max Weighted Matching Problem 57

4.1 Detailed Problem Definition and Applications . . . . . . . . . . . . . . . . 58
4.2 Computational Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.3 Algorithms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.3.1 Solving the Restricted Partitioning Problem . . . . . . . . . . . . . 66
4.3.2 Solving the Min-Max Weighted Matching Problem . . . . . . . . . . 67
4.3.3 Partition-Match Heuristics . . . . . . . . . . . . . . . . . . . . . . . 67
4.3.4 Match-Partition Heuristics . . . . . . . . . . . . . . . . . . . . . . . 68
4.4 Computational Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

5 Straddle Carrier Routing at Container Ports with Quay Crane Buffers 77

5.1 Related Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.2 Detailed Problem Definition . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.2.1 Problem Setting and Assumptions . . . . . . . . . . . . . . . . . . . 80
5.2.2 Notation and Detailed Problem Description . . . . . . . . . . . . . 82
5.2.3 A Mixed-Integer Program . . . . . . . . . . . . . . . . . . . . . . . 85
5.3 Computational Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
5.4 Algorithms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
5.4.1 Initial Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
5.4.2 Routing Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Contents xi

5.4.3 Fast Heuristic for Times and Buffer Capacities . . . . . . . . . . . . 98

5.5 Computational Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.5.1 Comparison of Algorithms . . . . . . . . . . . . . . . . . . . . . . . 100
5.5.2 Comparison with Practice . . . . . . . . . . . . . . . . . . . . . . . 104
5.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

6 Summary and Outlook 109

Bibliography 113
List of Figures

1.1 Algorithmic mechanism design (in case of direct revelation) and scheduling
games . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.2 (Direct revelation) algorithmic mechanism design (Kress et al., 2017) . . . 7

3.1 Cj (f (vjs , v−j )) for an exemplary instance with n = 10 and m = 2 . . . . . . 36

3.2 Plot of wjinf (dj ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.3 An arbitrary subsequence . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.4 Sorted lists of jobs L(w) and L(w0 ) with w < w0 . . . . . . . . . . . . . . . 53
0
3.5 Temporary schedules adk and adk with d > d0 . . . . . . . . . . . . . . . . . 54
0
3.6 Temporary schedules adk and adk with d < d0 . . . . . . . . . . . . . . . . . 55

4.1 A solution to an example instance of PMMWM. . . . . . . . . . . . . . . . 58

4.2 Potential schematic layout of a reach stacker based terminal. . . . . . . . . 60
4.3 Rail-road terminal (Boysen and Fliedner, 2010b). . . . . . . . . . . . . . . 61
4.4 Partition-Match heuristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.5 Match-Partition heuristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.6 Overview of all heuristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
4.7 Comparison of M PLS , M P , and P MBP S . . . . . . . . . . . . . . . . . . . . 71
4.8 Runtimes of P MBP S and P MREG . . . . . . . . . . . . . . . . . . . . . . . . 71
4.9 Runtimes of P MREG , M P , and M PLS . . . . . . . . . . . . . . . . . . . . . 72
4.10 Quality of CPLEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
4.11 Quality of P MREG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.12 Quality of P MBP S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.13 Quality of M P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
4.14 Quality of M PLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

5.1 Schematic layout of a straddle carrier based terminal . . . . . . . . . . . . 81

xiv List of Figures

5.2 Schematic representation of the transformation from IP to IS . . . . . . . . 90

5.3 Creating an initial solution - GREEDY . . . . . . . . . . . . . . . . . . . . 94
5.4 Connect paths to a closed tour . . . . . . . . . . . . . . . . . . . . . . . . . 95
5.5 Tricycle reference structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5.6 Bicycle reference structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5.7 Fixing time variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.8 2 quay cranes, 3 vehicles per crane. . . . . . . . . . . . . . . . . . . . . . . 105
5.9 3 quay cranes, 3 vehicles per crane. . . . . . . . . . . . . . . . . . . . . . . 106
5.10 4 quay cranes, 3 vehicles per crane. . . . . . . . . . . . . . . . . . . . . . . 107
List of Tables

1.1 Number sets used throughout this thesis . . . . . . . . . . . . . . . . . . . 3

1.2 Notation: machine scheduling problems . . . . . . . . . . . . . . . . . . . . 5
1.3 Notation: algorithmic mechanism design . . . . . . . . . . . . . . . . . . . 8

2.1 Overview - Job agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2.2 Overview - Unrelated machine agents . . . . . . . . . . . . . . . . . . . . . 26
2.3 Overview - Uniform machine agents . . . . . . . . . . . . . . . . . . . . . . 27

3.1 Example with j = 7, w7 = 18, t7 = 2, n = 10, m = 2 . . . . . . . . . . . . . 37

3.2 Additional notation for v−j ∈ V−j fixed . . . . . . . . . . . . . . . . . . . . 41

5.1 Notation used throughout this chapter . . . . . . . . . . . . . . . . . . . . 84

5.2 Variables used throughout this chapter . . . . . . . . . . . . . . . . . . . . 86
5.3 Simplifications used in the MILP . . . . . . . . . . . . . . . . . . . . . . . 86
5.4 Definition of start(i), end(i), and stack(i) . . . . . . . . . . . . . . . . . . 87
5.5 2 quay cranes, 6 vehicles, CPLEX unlimited - Quality. . . . . . . . . . . . 101
5.6 2 quay cranes, 6 vehicles, CPLEX limited - Quality. . . . . . . . . . . . . . 102
5.7 2 quay cranes, 6 vehicles, CPLEX limited - Runtime in s. . . . . . . . . . . 103
5.8 4 quay cranes, 12 vehicles, CPLEX limited - Quality. . . . . . . . . . . . . 103
5.9 4 quay cranes, 12 vehicles, CPLEX limited - Runtime in s. . . . . . . . . . 104
Chapter 1

Introduction and Preliminaries

Container ports are important parts of global transport chains. They are used to transship
containers between vessels and vehicles for land transport. Large container ports often
operate own rail-road terminals in order to connect the port with the hinterland efficiently.
New challenges and perspectives for container ports, and therefore for intermodal
transport logistics, mainly arise due to the ongoing increase of the container flow and the
resulting need to improve the throughput of containers. One way to do so is to enlarge
the port by building new berths and other necessary structures. If this is not possible or
too expensive, another way to improve the throughput of an existing port is to improve
the utilisation efficiency of the used equipment. Danish Ship Finance (2016) reports that
the world’s container market demand in 2016 has increased by 2.5 % in comparison to
the demand in 2012. It is furthermore projected to increase by another 4.7 % from 2016
to 2019. Moreover, the Institute of Shipping Economics and Logistics (2016) states a 8.4
% increase of the size of the international container fleet in 2015 and a doubling of the
average size of new container ships since 2009. This development puts the entire logistic
chain, and especially container ports and megahubs, under high pressure.
In order to cope with the increasing container throughput, container ports automa-
tize processes and decision making (e.g., by using automated guided vehicles and (semi-)
automated quay and stacking cranes as implemented at Container Terminal Altenwerder
(CTA) in Hamburg, Germany). Automatization, however, induces the need for thorough
analysis of all involved tasks. Simulation studies and optimization techniques help to orga-
nize the container throughput and to reduce the ships’ berthing time, which is considered
the major cost driver and thus the main objective of a port’s operator (Steenken et al.,
2004). However, apart from this objective, container ports also need to stay competitive
and attractive to their customers. Topics such as quality of service, waiting times, sus-
tainability, or waste minimization are increasingly important to the customers and have
to be addressed.
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2018
S. Meiswinkel, On Combinatorial Optimization and Mechanism Design
Problems Arising at Container Ports, Produktion und Logistik,
https://doi.org/10.1007/978-3-658-22362-5_1
2 1. Introduction and Preliminaries

A considerable amount of literature aims at improving the efficiency of container

ports from the perspective of the terminal operator. The operator is assumed to have
all necessary information to make decisions. Vis and de Koster (2003), Steenken et al.
(2004), and Stahlbock and Voß (2008a) provide detailed surveys of recent literature in
this field. In most cases, however, container ports act as service provider for customers
like shipping and logistic companies. In various decisions, the port operator depends on
the information provided by these customers. Problem settings that consider strategic
behavior of customers require other solution methods that combine methodologies from
different research fields. In this context, we will also focus on situations in this thesis,
where the operator is not equipped with all relevant data related to the problem because it
is private information of selfish customers who aim to influence the solution determined by
some scheduling algorithm by submitting false information to the decision maker. In some
cases, the decision maker can extract the true information by designing an appropriate
algorithm that sets the right incentives for these players. This in turn enables the decision
maker to generate “fair” solutions with respect to some social criterion that considers the
interests of all players. The design of such algorithms is studied in a field of research that
is usually referred to as algorithmic mechanism design (Nisan and Ronen, 2000).
In this thesis, we consider “classic” optimization problems as well as algorithmic mech-
anism design problems that arise at container ports. In contrast to the problems at con-
tainer terminals without direct interaction with customers’ information, there is no recent
literature overview for the considered algorithmic mechanism design problems. Therefore
we give a detailed overview over the recent development in this field. Additionally, we
analyze problems that arise at container terminals if the operators have to deal with
customers by combining machine scheduling problems with methods from the field of
algorithmic mechanism design. As a main result, we improve the understanding of a ma-
chine scheduling problem with two-parameter job agents by presenting new conditions for
truthful mechanisms that utilize the knowledge about the underlying scheduling problem.
We also consider internal optimization problems without any customers involved. To
be more precise, the transportation of containers between the quay and the storage area is
analyzed. The arising optimization problem depends on the utilized equipment and on the
considered tasks. We consider the problem of routing reach stackers that move containers
from a temporal storage area to the long-term storage area as well as the problem of
routing straddle carriers that move containers from a buffer at the quay crane directly to
the storage area.
1.1. Notation and Terminology 3

1.1 Notation and Terminology

In this thesis we will denote the set of real (rational) numbers by R (Q), the set of
nonnegative real (rational) numbers by R≥0 (Q≥0 ), and the set of positive real (rational
numbers by R>0 (Q>0 ). The number sets used throughout this thesis are presented in
Table 1.1. We assume the reader to be familiar with the basic concepts of operations

Table 1.1: Number sets used throughout this thesis

R, Q real (rational) numbers

R>0 , Q>0 positive real (rational) numbers
R≥0 , Q≥0 non-negative real (rational) numbers

research, combinatorial optimization, complexity theory, and with general concepts of

mixed-integer programming. Detailed introductions to these topics can be found, for
example, in Korte and Vygen (2008) or Schrijver (2003). However, a short introduction
to the notation and terminology concerning machine scheduling is given in Section 1.1.1.
This section is based on Błażewicz et al. (2007). Similar, Section 1.1.2 and Section 1.1.3
are concerned with the basics of mechanism design and graph theory.

1.1.1 Machine Scheduling

In this thesis we consider machine scheduling problems in the context of algorithmic game
theory. Unfortunately, the notation used in the scheduling and (algorithmic) game theory
communities is not always compatible. Therefore, we will sometimes deviate from the
standard scheduling notation.
Basically, a machine scheduling problem is characterized by a set J := {1, . . . , n} of
n jobs (tasks) and a set M := {m1 , . . . , mm } of m machines. Jobs and machines are
characterized by certain parameters, e.g. processing times or speeds. Furthermore, there
exist different performance measures. In this thesis, we restrict ourselves to scheduling
problems where all jobs are processed without preemption. Furthermore each job has to
be processed once on exactly one machine and each machine can process only one job at
a time.
We will now characterize the machines that are considered in this thesis. We restrict
ourselves to parallel machines and distinguish three types depending on their speeds. If all
machines in M operate on equal speeds, then we refer to them as identical (parallel) ma-
chines. If machines in M differ in their speeds, but the speed of a machine is independent
of the jobs, then we denote them by uniform (parallel) machines. The job-independent
speed of a machine i ∈ M is denoted by si . Third, if the speeds of the machines depend
4 1. Introduction and Preliminaries

on the jobs in J, then we call them unrelated (parallel) machines. We refer to the speed
of machine i ∈ M for processing job j ∈ J as sij .
In the following, we define the data that is used to characterize a job j ∈ J in this
thesis. We denote by tij the processing time of job j ∈ J on machine i ∈ M . In case of
identical machines we can drop the index for the machine, i.e. tj = tij for all i ∈ M . If
the machines are uniform, then tij = tj /si with i ∈ M , where tj is the standard processing
time. Analogously, we have tij = tj /sij with i ∈ M for unrelated machines. All processing
times are assumed to be positive numbers. The arrival time or release date rj is the time
at which job j is ready for processing. If the release dates are the same for all jobs j ∈ J,
then it is assumed rj = 0 for all j ∈ J. The due date of the job is denoted by dj . It
describes a time by which j should be completed. The weight wj specifies the relative
importance of job j.
Next, we present some definitions concerning the schedules and optimality criteria.
A feasible schedule o is an assignment of all jobs from J to machines from M together
with starting and/or completion times for each job such that the following conditions are
satisfied:

• each job is processed by exactly one machine and each machine processes at most
one job at a time,

• job j ∈ J is processed in time interval [rj , ∞),

• no job is preempted, and

• all jobs are processed.

We denote the set of all feasible schedules of a given machine scheduling problem by O.
For a given schedule o ∈ O we denote the completion time of a job j ∈ J by Cj . It
describes a time at which the processing of job j is completed. Furthermore, we define a
mapping Cj : O → R≥0 to describe the influence of the specific solution on the completion
times. We denote by Uj a step function Uj : O → {0, 1}. If job j completes strictly after
dj in a schedule o ∈ O, Uj (o) is equal to 1. Otherwise Uj (o) is equal to 0. The load Li of a
machine i ∈ M is defined as the sum of the processing times of all jobs that are assigned
to machine i. Since the load depends on the realized schedule o, we define the mapping
Li : O → R≥0 .
Table 1.2 provides an overview over the machine scheduling related notation used in
this thesis.
Graham et al. (1979) present a widely used and generally accepted classification
scheme for machine scheduling problems. It represents a specific problem by a three-field
1.1. Notation and Terminology 5

Table 1.2: Notation: machine scheduling problems

J set of jobs J = {1, . . . , n}

M set of machines M = {m1 , . . . , mm }
O set of feasible solutions of scheduling problem
tij processing time of job j ∈ J on machine i ∈ M
• single machine or identical (parallel) machines: tij = tj ∀ i ∈ M
• uniform (parallel) machines: tij = tj /si for a given speed si

• unrelated (parallel) machines: tij = tj /sij for a given speed sij

wj weight of job j ∈ J
rj release date of job j ∈ J
dj due date or deadline of job j ∈ J
Cj completion time of job j ∈ J Cj : O → R≥0
Uj unit penalty of job j ∈ J: 1 if j completes strictly after dj , 0 otherwise Uj : O → {0, 1}
Li load of machine i ∈ M Li : O → R≥0

notation, α|β|γ, where α describes the machine environment, β refers to job character-
istics, and γ relates to the (global) performance measure (optimality criterion). Each
field of the triple includes multiple elements, e.g. α = α1 , α2 , . . . , that represent specific
problem properties. The empty symbol, ◦, denotes the default value of an element and is
skipped when a triple is actually specified. A detailed look in the classification scheme is
given in Section 2.3.1. We refer to Błażewicz et al. (2007) and Leung (2004) for a more
detailed discussion.

1.1.2 Mechanism Design

In this section we give an overview over the basic notation and terminology concerning
game theory and algorithmic mechanism design as in Kress et al. (2018b). The games
considered throughout this thesis have three basic elements: players, strategy spaces, and
utility functions. Furthermore, we will restrict ourselves to considering non-cooperative
games. That is, players cannot form coalitions in order to generate group decisions. In
the context of machine scheduling problems, players may be machines or jobs. More
generally, one may also think of “owners” of multiple machines or jobs that act as single
players. Each player has an associated strategy space that represents the options that
the player can select from when the game is played. For example, when the players
correspond to jobs, each job may be allowed to select a machine to be processed on.
A player’s utility function assigns a utility level to every vector of strategies, i.e. each
combination of strategies that can potentially be selected by all players. With respect to
machine scheduling problems, the utility level could, for instance, be the completion time
of a given job.
We will consider fairly specific problem settings in the field of algorithmic game theory
6 1. Introduction and Preliminaries

for machine scheduling problems. These settings are characterized by the existence of
(rational and selfish) players, who are typically referred to as agents and can make a
single claim on some piece of information that may affect the final schedule. Furthermore,
there exists a central authority/planner, who is in charge of designing an interaction
protocol, a rewarding scheme (e.g. payments among players), and a scheduling algorithm
that determines the final schedule. Within this scope, there are two main streams of
literature that differ in the type of information that the agents possess and in the way
that the information affects an instance of the considered machine scheduling problem
(see Figure 1.1). In this thesis, we will focus one of these streams, which presumes that
Public Information

Players/Central Authority Machine Scheduling Prob./Rewarding Scheme

Agents (Machines or Jobs) Mathematical Model

Stream “Algorithmic Mechanism Design”
(direct revelation)
Stream “Scheduling Games”
announce agent characteristics
parameters
(private information)
select agent-specific
variables
machine-job assignment
...

problem instance
designs and controls
Central Authority/Planner Algorithm Rew. Scheme

schedule “rewards”

Figure 1.1: Algorithmic mechanism design (in case of direct revelation) and scheduling games

the agents have private information on their own characteristics. Jobs, for instance, may
privately know their due dates or job weights. The remaining data, e.g. the number
of machines and jobs, is usually assumed to be publicly known. The central planner
designs some protocol of interaction that the agents have to follow. This protocol may
be fairly general. We will, however, restrict ourselves to considering “direct protocols”
that allow the agents to solely (but not necessarily truthfully) announce concrete values
that represent their private information when the game begins. In terms of optimization
problems, these agents therefore fix a subset of parameters. When acting selfishly, they
will try to influence the solution determined by the scheduling algorithm by submitting
false information. However, by designing appropriate algorithms and rewarding schemes
that set the right incentives, the central planner can extract the true information of
these players, for example, in order to generate fair solutions with respect to some social
criterion that considers the interests of all agents. In the second stream, that we do not
consider in this thesis (the interested reader may refer to Heydenreich et al., 2007), the
(usually completely informed) agents, again pursuing selfish goals, commit decisions on
machine-job assignments and thus implicitly fix variables of optimization problems. We
can, for example, think of jobs that choose to be processed on specific machines.
We would like to stress the fact that the aforementioned fields of research are not
1.1. Notation and Terminology 7

always clearly separated in the literature. Similarly, the terms used to identify specific
problems within these fields may differ among different articles. We will follow Nisan
and Ronen (2001), who define (algorithmic) mechanism design to aim at “study[ing] how
privately known preferences [...] can be aggregated towards a ‘social choice’ ” (see also
Nisan and Ronen, 1999), which corresponds to the first stream described above. Our focus
on direct protocols is usually termed direct revelation (see, for example, Nisan, 2007).
Others use the term “algorithmic mechanism design” in a more general context, even
when there is no privately owned information (see, for instance, Immorlica et al., 2009).
Problems in the second stream are sometimes referred to as (machine) scheduling games
(see, for instance, Harks et al., 2011; Roughgarden and Tardos, 2007) or load balancing
games (Vöcking, 2007). These games are closely related to the categories of congestion
games (Rosenthal, 1973) and coordination mechanisms (Christodoulou et al., 2009a). In
all of these areas, one is usually interested in deciding whether (Nash) equilibria exist,
how (in-)efficient these equilibria are when compared to socially optimal solutions, and
how fast algorithms can compute them (Harks et al., 2011; Roughgarden and Tardos,
2007).

Algorithmic Mechanism Design

Based on the illustration in Figure 1.2, we will now describe the (direct revelation) algo-
rithmic mechanism design setting in the context of machine scheduling problems in more
detail. The corresponding notation used throughout this thesis in context of mechanism

o
v1t
p1 (v)
1
V1
Mechanism Schedule
Set A of agents

v1
... f
p1 , . . . , p|A|
f (v)
o
v|A|

t
v|A|
|A| p|A| (v)
V|A|
o private information
public information

Figure 1.2: (Direct revelation) algorithmic mechanism design (Kress et al., 2017)

design is summarized in Table 1.3.

Let A denote the set of rational and selfish agents. Each agent k ∈ A has a (true)
valuation function vkt : O → R, that maps every feasible schedule of the considered
scheduling problem to a real value. vkt is private information of the agent and is thus
8 1. Introduction and Preliminaries

Table 1.3: Notation: algorithmic mechanism design

A set of agents
Vk set of potential valuation functions for agent k ∈ A
V Cartesian product of sets Vk , k ∈ A V = V1 × · · · × V|A|
V−k Cartesian product of sets Vl , l ∈ A \ {k} V = V1 × · · · × Vk−1 × Vk+1 × · · · × V|A|
f social choice function/allocation rule f :V →O
vkt true valuation function of agent k ∈ A Vk 3 vkt : O → R
vk claimed valuation function of agent k ∈ A Vk 3 v k : O → R
pk payment function for agent k ∈ A pk : V → R
uk utility function of agent k ∈ A uk (vk , v−k ) = vkt (f (v)) + pk (v)
v−k vector of claimed valuation functions except vk , k ∈ A v−k = (v1 , . . . , vk−1 , vk+1 , . . . , v|A| )
v = (v1 , . . . , v|A| )
v vector of claimed valuation functions
v = (vk , v−k ), k ∈ A

sometimes referred to as the agent’s type. Negative values can, for example, relate to
costs incurred to a (job) agent due to waiting for being completed.
Each agent k ∈ A reports a valuation function vk , that may deviate from the true
valuation function vkt , to the mechanism. Each valuation function vk , k ∈ A, is element
of a publicly known set Vk . We define V := V1 × · · · × V|A| . Furthermore, we denote
the vector of all valuation functions reported to the mechanism by v = (v1 , . . . , v|A| )
and the vector of all valuation functions reported to the mechanism except of vk by
v−k = (v1 , . . . , vk−1 , vk+1 , . . . , v|A| ). For the sake of notational convenience, we will use v
and (vk , v−k ) interchangeably.
The mechanism itself is designed and controlled by a central planner. It is a pair
(f, p), composed of a social choice function f : V → O and a vector of payment functions
p := (p1 , . . . , p|A| ), with pk : V → R for all k ∈ A. The mechanism (f, p) is said to
implement the social choice function f . It is efficient, if f optimizes the given global
objective function (Heydenreich et al., 2008; Mitra, 2001, 2002). As described in Section
1.1.2, in the context of scheduling problems, the social choice function is an algorithm
that determines a feasible schedule based on the valuation functions reported to the
mechanism. It is also referred to as the scheduling rule or allocation rule. By controlling
the allocation rule and the payment functions, the cental planner can design mechanisms
with different features.
Each agent k ∈ A selfishly aims to maximize the utility function uk : V → R, which
is assumed to be quasi-linear, i.e. corresponds to the sum of the agent’s valuation of the
schedule (determined by the allocation rule) and the (potentially negative) corresponding
payment from the mechanism, uk (vk , v−k ) := vkt (f (vk , v−k )) + pk (vk , v−k ). Sometimes it
is reasonable to focus on individually rational mechanisms (also referred to as voluntary
participation mechanisms, see Auletta et al., 2004a), that assume (or feature) the utilities
1.1. Notation and Terminology 9

of each agent to always be non-negative (see, for instance, Hoeksma and Uetz, 2013; Nisan,
2007).

Non-Deterministic Problem Settings

All of the above definitions assume a deterministic problem setting. Unless stated other-
wise, this will also be our standard assumption throughout the remainder of this thesis.
The literature, however, also considers two main non-deterministic settings. First, one
can assume the allocation rule to be non-deterministic, i.e. let the scheduling algorithm’s
logic employ some degree of randomness, or consider randomized payments. A resulting
mechanism is then referred to as a randomized mechanism (see, for example, Angel et al.,
2012; Nisan, 2007). Second, one can deviate from the assumption of the agents having no
information at all about the private information of the other agents. Sometimes, it may
be appropriate to assume that there exists some commonly known probability distribu-
tion over the private information of each player (Nisan, 2007). In both non-deterministic
cases, agents are usually assumed to maximize expected utilities. The definitions of the
standard setting carry over to the non-deterministic settings in a straightforward manner.

Truthfulness and VCG Mechanisms

As indicated before, agents selfishly aim to maximize their (expected) utility functions
and may therefore lie about their true valuation functions. To overcome this problem, the
central planner may want to design the mechanism such that agents behave truthfully.
The literature considers different concepts of truthfulness. We will briefly outline the
concepts that are relevant for this thesis in this section.
A mechanism is (dominant strategy) incentive compatible or truthful (Nisan, 2007) if
it guarantees that reporting the true valuation function maximizes the utility function
of a rationally acting agent for all possible vectors of claimed valuation functions of the
other agents, i.e. if uk (vkt , v−k ) ≥ uk (vk , v−k ) for all k ∈ A, all vk ∈ Vk , and all v−k ∈ V−k .
In case of randomized mechanisms, articles usually apply an adapted notion of truth-
fulness, referred to as truthfulness in expectation. Formally, let E(uk (v)) denote the
expected value of the utility function of agent k ∈ A over the randomization of the mech-
anism. A mechanism is truthful in expectation if E(uk (vkt , v−k )) ≥ E(uk (vk , v−k )), for all
k ∈ A, vk ∈ Vk , and v−k ∈ V−k . Alternatively, one may slightly deviate from our def-
inition in Section 1.1.2, and define a randomized mechanism to allow distributions over
deterministic mechanisms. Then, a randomized mechanism is defined to be truthful in
the universal sense if every deterministic mechanism in the support is dominant strategy
incentive compatible (Nisan, 2007).
10 1. Introduction and Preliminaries

Similarly, when considering the case of publicly known probability distributions over
the type spaces of agents (that we will denote by Φk for agent k ∈ A) as described in
before, one can apply a weaker notion of truthfulness, referred to as Bayes-Nash incentive
compatibility (see, for example, Duives et al., 2015; Heydenreich et al., 2008; Hoeksma
and Uetz, 2013). Here, for each agent, telling the truth must be (weakly) dominant in
expectation over the publicly known distributions over the type spaces of the other agents.
One of the most important general results in the field of mechanism design is the
Vickrey-Clarke-Groves mechanism (VCG mechanism), that was suggested by Vickrey
(1961) and generalized by Clarke (1971) and Groves (1973). A mechanism is called a
VCG mechanism, if the social choice function maximizes social welfare, i.e. the sum of
the valuation functions of all agents, and if the payment functions pk (v), k ∈ A, are given
by
Xn
pk (v) = hk (v−k ) − vl (f (v)),
l=1,l6=k

where hk (v−k ) : V−k → R. Note that hk , k ∈ A, is independent of the valuation function

vk ∈ Vk reported by agent k. The concept of VCG mechanisms was further generalized
by Roberts (1979) to social choice functions that belong to the set of so called affine max-
imizers. A VCG mechanism is (dominant strategy) incentive compatible, but a major
drawback is the need for finding optimal solutions to the underlying problem of maximiz-
ing social welfare, which may be NP-hard (see, for instance, Nisan, 2007). Hence, in the
context of scheduling problems, VCG mechanisms are oftentimes not appropriate even
if the objective function of the specific scheduling problem corresponds to maximizing
social welfare. One must therefore usually make use of other theoretical results related to
incentive compatibility that are suitable for approximate and heuristic algorithms. These
results oftentimes turn out to “boil down to a certain algorithmic condition of mono-
tonicity” (Lavi and Swamy, 2009). The interested reader is referred to Heydenreich et al.
(2007); Lavi and Swamy (2009)

1.1.3 Graph Theory

In this section, we introduce the notation used for graphs in this thesis. The used nota-
tion follows standard combinatorial optimization books as Korte and Vygen (2008) and
Schrijver (2003).
A graph G = (V, E) consists of two (finite) sets V and E. The set V is referred to as
vertex set or node set and we define n := |V |. The elements of V are called vertices or
nodes. The set E is called edge set and we define m := |E|. The elements of E are referred
to as edges. Edges can be directed or undirected. An undirected edge e is represented
1.1. Notation and Terminology 11

by a subset of V with two elements and is denoted by e = {u, v} ⊆ V . The elements

of the subset are called end points of the edge. A graph G = (V, E) with all edges in E
undirected is called undirected graph. In contrast to an undirected edge, a directed edge
is an ordered pair of nodes (u, v) with u, v ∈ V . The first node of the pair is called start
node and the second node is called target node or end node. A graph G = (V, E) with all
edges in E directed is called directed graph. Note, that in this thesis the term graph refers
to either an undirected or directed graph. Analogously the term edge refers to either an
undirected or directed edge.
If e = {u, v} ∈ E (or e = (u, v) ∈ E respectively), we say u and v are connected or
joined by an edge. The nodes u and v are called adjacent if {u, v} ∈ E (or (u, v) ∈ E).
An edge e ∈ E and a node v ∈ e are called incident if v is either the start node or an end
node of e. The degree of a node v denotes the number of edges incident with v. In case
of a directed graph G = (V, E) and a node v ∈ V , we refer to all edges with v as its start
node as outgoing edges of v. All edges with v as its end node are referred to as incoming
edges of v.
A bipartite graph G = (U, V, E) consists of two disjoint node sets U and V and an
edge set E. The node sets are called bipartitions of G. In a bipartite graph G = (U, V, E)
there is no edge e ∈ E that connects two nodes from the same bipartition. In other words,
all edges in E connect exactly one node in U with exactly one node in V .
Given an undirected or directed graph G = (V, E), a walk is sequence of edges W =
(e1 , . . . , ek ) such that k ≥ 2 and ei = {v−i , vi } (or e = (v−i , vi ), respectively) for i ∈
{1, . . . , k}. We sometimes represent a walk by its nodes W = (v0 , . . . , vk ), to ease the
notation. We refer to the node v0 as the start node and to vk as the end node of W . If all
nodes v0 , . . . , vk in a given walk W are distinct, we call the walk path. A cycle is a walk
W = (e1 , . . . , ek ) with v0 , . . . , vk−1 distinct and v0 = vk .
A graph G is called edge-weighted, if each edge e ∈ E is associated with a weight
we ∈ R. Usually, G is referred to as a triple G = (V, E, w) that consists of a node
set V , an edge set E, and a weight (or cost) function w : E → R. We use w(e) and
we synonymously. Analogously, a node-weighted graph is a graph G = (V, E, w) with
additional weights wv ∈ R for each v ∈ V ( or a mapping w : V → R, respectively).

Optimization Problems on Graphs

In the following, we introduce some optimization problems that are defined on graphs and
considered in this thesis.
A matchings M on an undirected graphs G = (V, E) is a subset of E such that all
elements in M are disjoint. In other words, each node v ∈ V is incident to at most one
12 1. Introduction and Preliminaries

edge in M . The matching with maximal cardinality is called maximum matching. The
problem of finding a matching M on a graph G = (V, E) with maximal cardinality is
called maximum matching problem. Given an edge-weighted graph G = (V, E, w), the
weight w(M ) of a given matching M on G is the sum of the weights of all edges in M ,
P
i.e. w(M ) = e∈M we . Given an edge-weighted bipartite graph G = (U, V, E, w), the
problem of finding a maximum matching of minimum weight is referred to as min-sum
weighted matching. These basic matching problems are well studied problems. Further
details and information on these problems can be found, for example, in Burkard et al.
(2009).
Another well studied optimization problem is the (symmetric) traveling salesman
problem (TSP). Given an edge weighted undirected graph G = (V, E, w), the problem is
to find a cycle that contains all nodes in V with minimal weight. The weight of a circle
W is defined as the sum of the weights of all edges in W . In context of the TSP, the circle
W is often referred to as a tour. The asymmetric traveling salesman problem is defined
analogously on edge weighted directed graphs. Further information on the TSP and its
variants can be found, for example, in Gutin and Punnen (2007).

1.2 Outline
The remainder of this thesis is organized as follows. In Chapter 2, we present a review of
recent contributions in the field of machine scheduling problems in the context of algo-
rithmic mechanism design. We review the categories and characterizing problem features
of machine scheduling settings in the algorithmic mechanism design literature and extend
the widely accepted classification scheme of Graham et al. (1979) for scheduling prob-
lems to include aspects relating to mechanism design. Based on this hierarchical scheme,
we give a systematic overview of recent contributions in this field of research. In Chap-
ter 3, we consider two machine scheduling problems that arise at container ports when
dealing with customers. Both problems are investigated with methods from the field of
algorithmic mechanism design. The first part of the chapter is concerned with machine
scheduling problems in context of one-parameter valuation function domains. We consider
the problem of minimizing the total weighted completion time of all jobs and investigate
the truthfulness of List-Scheduling algorithms for parallel machines. In the case of one
machine, we come up with results for a budget-balanced VCG mechanism. In the second
part, we consider machine scheduling problems in context of two-parameter valuation
function domains. We derive a set of properties that is equivalent to the well-known
condition of cycle monotonicity, which is a general condition for truthful mechanisms in
non-convex valuation function domains. Our results utilize knowledge about the underly-
1.2. Outline 13

ing scheduling problem, so that the resulting properties are easier to implement and verify
than the general condition of cycle monotonicity. We illustrate the use of our results by
analyzing an example algorithm that has recently been proposed in the literature for the
case of one machine.
Chapter 4 and 5 are concerned with “classic” optimization problems. Both chapters
have in common, that they consider optimization problems dealing with internal container
movements between the quay and the storage area of the ports. In Chapter 4, we intro-
duce and analyze the Partitioning Min-Max Weighted Matching Problem (PMMWM).
PMMWM combines the problem of partitioning a set of vertices of a bipartite graph into
disjoint subsets of restricted size and the strongly NP-hard Min-Max Weighted Match-
ing (MMWM) Problem, that has recently been introduced in the literature. In contrast
to PMMWM, the latter problem assumes the partitioning to be given. Applications of
the PMMWM arise at small and midsize container ports when reach stackers are used
to transport containers from a temporary storage area to the long-term storage area.
Other applications of the PMMWM arise at the rail-road terminal of a container port.
We propose a MILP formulation for PMMWM and prove that the problem is NP-hard
in the strong sense. Two heuristic frameworks are presented. Both of them outperform
standard optimization software. Our extensive computational study proves that the al-
gorithms provide high quality solutions within reasonable time. Chapter 5 deals with a
straddle carrier routing problem that arises at container ports where containers need to
be exchanged between a storage area of the sea port and a small buffer for locally storing
loaded or unloaded containers within reach of the quay cranes. The problem is how to
route the container carrying straddle carriers such that a loading or unloading sequence at
the quay crane is respected and the turnaround time of the vessel is minimized. The prob-
lem is proven to be strongly NP-hard and we present a mixed-integer programm based
on the asymmetric traveling salesman problem with precedence constraints. We propose
two decomposition heuristics and compare the most promising one with an approach used
in practice. Computational experiments are based on real-world data. The thesis closes
with a summary and an outlook on future research in Chapter 6.
Chapter 2

Mechanism Design and Machine

Scheduling: Literature Review

There exists a tremendous body of literature that focuses on intersections of (algorithmic

aspects of) computer science and game theory (as well as economic theory). The resulting
fields of intersecting disciplines are usually referred to as algorithmic game theory (an
excellent introduction and overview is given by Nisan et al., 2007). Many research articles
in this field focus on auction contexts (see Krishna, 2010). Recently, however, there has
been a growing interest in taking a game theoretic perspective on machine scheduling
problems, which has resulted in a fairly large amount of research articles that we aim to
review and classify in this chapter as in Kress et al. (2018b).
In order to give a systematic record of the academic efforts in this field of research,
we provide a corresponding hierarchical classification scheme. This scheme augments the
classification scheme by Graham et al. (1979) for machine scheduling problems, which is
widely used and generally accepted in the scheduling community. We are motivated by
the fact that adoptions and extensions of Graham et al. (1979) have been successfully
implemented in a variety of other problem fields (see, for example, Allahverdi et al., 2008;
Boysen and Fliedner, 2010a; Boysen et al., 2007, 2009; Brucker et al., 1999; Potts and
Kovalyov, 2000).
The remainder of this chapter is structured as follows. The scope of review is de-
scribed in Section 2.1. In Section 2.2, we present an overview of problem categories and
problem features that characterize machine scheduling settings in the algorithmic mecha-
nism design literature. This will lay the foundation for our extension of the classification
scheme of Graham et al. (1979) in Section 2.3 and allow a structured overview of the
literature in Section 2.4. The chapter closes with a conclusion and an illustration of re-
search challenges that can be identified based on the prior classification of the literature

© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2018

S. Meiswinkel, On Combinatorial Optimization and Mechanism Design
Problems Arising at Container Ports, Produktion und Logistik,
https://doi.org/10.1007/978-3-658-22362-5_2
16 2. Mechanism Design and Machine Scheduling: Literature Review

in Section 2.5.

2.1 Scope of Review

In this section, we present details on the scope of our literature review.
Broadly speaking, scheduling problems are concerned with allocating scarce resources
over time to perform a set of tasks with the objective of optimizing one or more perfor-
mance measures (Błażewicz et al., 2007; Leung, 2004). Resources, tasks and performance
measures can be of very different nature. We will focus on resources that (directly) rep-
resent some kind of processor or machine, i.e. machine scheduling problems, and set the
scope of our literature review, that complements the articles by Heydenreich et al. (2007)
and Christodoulou and Koutsoupias (2009), to include research on

• machine scheduling problems

• in offline-settings, where all information regarding the problem is known or has been
announced (in contrast to online-settings) at the unique time of planning,

• in a non-cooperative, game theoretic context, where players cannot form coalitions

• and have private information on their own characteristics which they directly (but
not necessarily truthfully) announce by making a single claim,

• in the presence of a central authority that is in charge of designing a rewarding

scheme and the scheduling algorithm that determines the final schedule based on
the information submitted by the players and the publicly known information.

A more detailed description of the mechanism design nomenclature and therefore of

the scope of review is given in Section 1.1.2.

2.2 Review of Problem Categories and Features

In addition to the classical problem categories of the classification scheme of Graham
et al. (1979) and its extensions, the algorithmic mechanism design literature for machine
scheduling problems (as restricted in Section 2.1) can be structured based on multiple cat-
egories, that we will present in the following sections, where we will also discuss additional
problem features that we have not yet introduced.
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