Selecting Efficient Service-providers in Electric Power Distribution Industry Using Combinatorial Reverse Auction

Abstract

In this paper, a combinatorial reverse auction mechanism is proposed for selecting the most efficient service-providers for resolving sustained power interruptions in multiple regions of an electric power distribution company’s responsibility area. Through this mechanism, supplying the required service in each region is assigned to only one potential service-provider considering two criteria including cost and service time. So, the corresponding winner determination problem of the proposed auction mechanism is formulated as a bi-objective combinatorial optimization problem. However, finding a feasible solution for the formulated problem as well as its solving is NP-complete. Since exact optimization algorithms are failed in solving this kind of problems in a reasonable time, a problem specific metaheuristic called NSGA-II that is an evolutionary algorithm for solving multi-objective optimization problems is developed to estimate the set of Pareto optimal solutions of the formulated bi-objective winner determination problem. In our developed NSGA-II, two problem-specific operators are proposed for creating initial feasible solutions and converting infeasible solutions to feasible ones. Furthermore, a new method for determining the population size based on the size of problem instance is proposed. We conduct a computational experiment in which several randomly generated problem instances are solved using the proposed NSGA-II in different settings. Computational results of proposed algorithm in different settings are compared using a quality measure and statistical hypothesis tests. The results of performance comparison show that the proposed NSGA-II with a population size determined by proposed method and a different form of binary tournament method performs better in finding non-dominated solutions for different instances of formulated bi-objective optimization problem.