Case Article—Growing Pains: A Case Study for Large-Scale Vehicle Routing

Abstract

This is a case study focused on the quantitative modeling of transportation services for use in undergraduate and graduate level transportation and logistics or optimization courses. The problem considered in the case is a capacitated vehicle routing problem (CVRP) with additional side constraints corresponding to delivery windows and United States Department of Transportation drive and duty time regulations. The case is presented in the context of a fictional company, Northeastern Home Goods (NHG), but is based on a problem encountered by a real organization. NHG is considering outsourcing its transportation services to a firm having logistics as a core competency. Specifically, NHG wishes to evaluate the transportation costs that will result if a single distribution center is used to serve all of NHG’s current stores according to a preexisting store delivery schedule. The primary objective of the case is to provide students with hands-on experience developing and applying solution techniques for a large unstructured vehicle routing problem. Secondary objectives include requiring students to think logically through the process of creating good solutions, promoting continuous improvement, and encouraging students to consider the business implications of their recommendations.