Abstract
The problem of sharing manufacturing, inventory or capacity to improve performance is
applicable in many decentralized operational contexts. However, solution of such problems
commonly requires an intermediary or a broker to manage information security concerns of
individual participants. Our goal is to examine use of cryptographic techniques to attain the
same result without the use of a broker. To illustrate this approach, we focus on a problem
faced by independent trucking companies that have separate pickup and delivery tasks and
wish to identify potential efficiency enhancing task swaps while limiting the information
the companies must reveal to identify these swaps. We present an algorithm that finds
opportunities to swap loads without revealing any information except the loads swapped,
along with proofs of the security of the protocol. We also show that it is incentive compatible
for each company to both follow the protocol correctly as well as provide their true data.
We apply this algorithm to an empirical dataset from a large transportation company and
present results that suggest significant opportunities to improve efficiency through Pareto
improving swaps. This paper uses cryptographic arguments in an operations management
problem context to show how an algorithm can be proven incentive compatible as well as
demonstrate the potential value of its use on an empirical dataset
