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The Period Vehicle Routing Problem with Service Choice

Industrial Engineering and Management Sciences Department, Northwestern University, 2145 Sheridan Road, Technological Institute, Evanston, Illinois 60208-3119
Industrial Engineering and Management Sciences Department, Northwestern University, 2145 Sheridan Road, Technological Institute, Evanston, Illinois 60208-3119
Industrial Engineering Department, Tel Aviv University, Tel Aviv 69978, Israel
pete{at}northwestern.edu
ksmilowitz{at}northwestern.edu
tzur{at}eng.tau.ac.il

The period vehicle routing problem (PVRP) is a variation of the classic vehicle routing problem in which delivery routes are constructed for a period of time (for example, multiple days). In this paper, we consider a variation of the PVRP in which service frequency is a decision of the model. We refer to this problem as the PVRP with service choice (PVRP-SC). We explore modeling issues that arise when service choice is introduced, and suggest efficient solution methods. Contributions are made both in modeling this new variation of the PVRP and in introducing an exact solution method for the PVRP-SC. In addition, we propose a heuristic variation of the exact method to be used for larger problem instances. Computational tests show that adding service choice can improve system efficiency and customer service. We also present general insights on the impact of node distribution on the value of service choice.

Key Words: logistics; vehicle routing; service choice
History: Received: April 2005; revised: August 2005; accepted: September 2005.

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