Allocation of in-house services: Experimental comparison of allocation mechanisms

Thomas Elendner and R. Femerling

No 577, Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel from Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre

Abstract: In this paper we consider the problem of allocating scarce resources in a divisionalized company; the resources are made available by the headquarters and requested by profit centers (PCs). This problem was observed at a large german insurance company (LAGIC). Currently, the resources are allocated for free; for the future, LAGIC proposes to use an iterative allocation mechanism to solve the allocation problem. Alternatively, we present a combinatorial auction-based allocation mechanism. Within experimental tests the performance of these two mechanisms is analyzed. To this end, instances are generated motivated by the problem size and structure occurring at LAGIC.

Keywords: Resource allocation; in-house services; combinatorial auctions; efficient allocation; winner determination; multidimensional binary knapsack problem; instance generator (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauman:577

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