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Solving a Dynamic and Stochastic Vehicle Routing Problem with a Sample Scenario Hedging Heuristic

Molde University College, 6411 Molde, Norway
Molde University College, 6411 Molde, Norway
HEC Montréal, Canada
lars.m.hvattum{at}himolde.no
arne.lokketangen{at}himolde.no
gilbert{at}crt.umontreal.ca

The statement of the standard vehicle routing problem cannot always capture all aspects of real-world applications. As a result, extensions or modifications to the model are warranted. Here we consider the case when customers can call in orders during the daily operations; i.e., both customer locations and demands may be unknown in advance. This is modeled as a combined dynamic and stochastic programming problem, and a heuristic solution method is developed where sample scenarios are generated, solved heuristically, and combined iteratively to form a solution to the overall problem.

Key Words: dynamic vehicle routing; stochastic vehicle routing; heuristics
History: Received: March 2004; revised: January 2006; accepted: April 2006.

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