A TACTICAL/STRATEGIC LEVEL COST ANALYSIS BASED ON VISIT TIME PREFERENCES FOR VEHICLE ROUTING PROBLEM WITH SIMULTANEOUS PICKUP AND DELIVERY

Abstract

Vehicle Routing Problem with Simultaneous Pickup and Delivery (VRPSPD) has been studied for long years and used to model for many real-life applications. The problem is basically to find optimal routes for vehicles that serve customers in a service area to collect as well as deliver goods at the same time. Many logistic companies such as cargo, post, online supermarket, etc. face this problem in their daily operations. Because of high competitions in the sector, companies start to provide visit time preferences that customers can select. Although this is highly preferred by customers, it causes additional costs for companies since it is highly probable that preferences of customers violate optimal routes of vehicles. This problem is called as VRPSPD in Time Windows (VRPSPDTW). In this study, we develop a tactical/strategic level pricing policy based on calculation of additional travel time cost caused by visit time preferences of customers. Idea behind the policy is that solving VRPSPD for same customer set with/without considering time windows in each trial. After conducting many trials for different customer sets, average differences between travel times of VRPSPD and VRPSPDTW are determined. A generic hourly additional prices based on the average differences are calculated. Both problems are modelled as mixed ineger linear programmings and solved with CPLEX 12.9. Differences among travel times vary from 32 to 180 minutes according to experimental settings. Furthermore, results do not only change with time windows, but also different service regions play important role on results.