Terry Friesz, the Harold and Inge Marcus Chaired Professor in Industrial Engineering, and Tao Yao, assistant professor of industrial engineering, were recently awarded two grants from the National Science Foundation (NSF).
The two were awarded a two-year, $350,000 grant to study stochastic dynamic game-theoretic models of urban freight systems. They will develop new city logistics planning and pricing tools that recognize the intrinsic uncertainty of freight demands, costs and delivery times. A family of mathematical models in the form of stochastic dynamic games and their robust counterparts, which exploit recent advances in revenue management and nonlinear pricing theory, will be created to describe freight systems in a variety of urban settings.
Friesz and Yao have also been awarded a three-year, $331,000 NSF grant to study congestion options. They will study congestion securities, market mechanism design for congestion rights and dynamic and stochastic models for congestion pricing and derivatives. The award was the NSF's first grant to study congestion from the financial engineering point of view.