The Consistent Vehicle Routing Problem with heterogeneous fleet

Abstract

Customer relationship management is of high importance as it strengthens customer satisfaction. Providing consistent customer service cultivates customer retention and brand loyalty. This paper examines a new customer-oriented routing problem, the Consistent Vehicle Routing Problem with heterogeneous fleet. The objective is to create cost-efficient routing plans, utilising a fixed fleet of vehicles with heterogeneous operational characteristics, variable and fixed costs, while providing consistent customer service over multiple periods. Service consistency consists in person and visiting time consistency. A mathematical model capturing all the attributes of the problem is developed and utilised to solve small-scale instances to optimality. To address larger instances, a hierarchical Tabu Search framework is proposed. The proposed metaheuristic utilises an upper-level Tabu Search and an underlying Variable Neighbourhood Descent algorithm. Computational experiments conducted on existing and new benchmark instances show the flexibility, effectiveness and efficiency of the proposed framework. Various managerial insights are derived by examining the cost of imposing customer service consistency as well as customer–vehicle incompatibility constraints.