Abstract
Freight flows are in essence a result from the exchange of goods between producers and consumers and the transporting firms moving the goods. This essentially constitutes a market interaction among different type of firms, differentiated by many attributes like industry type, size, location and role in the supply chain. A usual final outcome of such an interaction manifests itself in the form of Production-Consumption (PC) matrices, tabulating regional production and consumption pairs for the different goods and geographical region being simulated. It is often the case that this information is obtained only at an aggregate level, either due to firms’ unwillingness to share their trading information or the high cost of obtaining this data or both. Different techniques are used to disaggregate such data. This process often implies over simplified assumptions. In this paper we present a bottom up approach to simulate this goods interchange process between production and consumption firms. The proposed model is based on an offer negotiation and evaluation process among three types of firms; production firms, consumption firms and carrying (transport) firms. The interaction is based on actual firms’ decisions. Agent based simulation technique is used to facilitate capturing some behavioral aspects of the different agents (firms) in the model. One outcome of this model is a set of PC matrices which can be used in further transport modelling steps.