Vehicle Routing Models
Vehicle Routing Models
Vehicle Routing Problems in Supply Chain Management
With the emergence of international markets and the growth of globalization,
the management of supply chains has gained increased attention. The high com‐
plexity of the underlying procurement, production and distribution processes, as
well as the increasing number of parties involved, create the necessity for effi‐
cient decision support systems. Traditionally, these three processes have mostly
been solved as single problems with little interactions between them.
The focus on single subproblems neglects structural interdependences and may
lead to suboptimal decisions. Nowadays, an efficient and sustainable use of re‐
sources is becoming critical for the survival of organizations. This can only be
achieved by considering the interdependencies of integrated supply chain ser‐
vices explicitly.
Lecture 12 1
VRP with Time Windows
The VRPTW consists of finding a set of routes for vehicles such that
• each routes starts and ends at the depot;
• each customer is visited by exactly one vehicle in predefined time window;
• the total demand of customers assigned to a single vehicle does not exceed
its loading capacity;
• routes start and end within a driver’s working time;
• the sum of the routing cost and of the penalties for time windows violations
is minimized.
Lecture 12 2
Decision Variables
• binary flow variables equal to 1 iff vehicle traverses from customer to
customer ;
• binary variables equal to 1 iff vehicle visits customer and delivers
demand for each product ;
• time variables 0 define the start of service customer by vehicle
;
• penalty variable 0 model the delay with respect to the start of service of
customer .
0,1, … , , 1 , where 0 and 1 denote the depot,
is service time for customer .
Lecture 12 3
Mathematical Model
min
. . , ;
1; 0, 1 ; ; 0 , ;
, 0, 1 ; , 1, ;
1 , , , ;
, 0, 1 ;
, 0, 1, ;
, 0,1 , , 0.
Lecture 12 4
Lotsizing Problem in Production Planning
In the lotsizing problem we try to optimize the tradeoff between setup and inven‐
tory holding costs:
− Producing large batches of products at a time reduces the number of setup
operations involved. However, the resulting inventory stock levels and holding
costs become higher.
− Producing smaller quantities of products at a time leads to lower average in‐
ventory costs, but results in a setup costs increase.
Customers may only be serviced once all required products are ready to be dis‐
patched and shipped. The earlier customer orders are ready, the earlier vehicles
may depart and distribute the items to customers.
Lecture 12 5
The Lotsizing Problem and Routing Problem
Let 1, … , | | denote the set of time periods per day available for produc‐
tion, and let | | . The total production capacity in is denote by .
Each setup operation cost of product is denoted by and denotes the set of
products.
Decision Variables
0 is the amount of product produced in time slot ;
0,1 is equal to 1 iff product is made in period ;
0 is the stock level of product at the start of period ;
0 is the amount of goods of type to be loaded into vehicle
in time period ;
0,1 is equal to 1 iff vehicle leaves the depot at time .
Lecture 12 6
Mathematical Model
min
. . , ;
, , ; 0, ;
, , ;
1, ; , ;
1 , , , ;
1 , , , ;
, , 0; , 0,1 ; and all constraints of VRPTW
Lecture 12 7
Machine Scheduling Problem in Production Planning
Scheduling is a well‐studied problem in operations management. Depending on
the characteristics of the underlying production process one can differentiate
between job shop, flow shop, and the more general open shop problems.
Scheduling lies at the central core of operational production planning, where jobs
need to be assigned to machines, and schedules must fulfill a number of prece‐
dence or other technical requirements.
Once a good has been produced, it may be delivered to the next layer of the
supply chain, and transportation may only start after the last task of the produc‐
tion process is completed. Scheduling decisions interfere with decisions for the
routing problem and vice versa.
Lecture 12 8
Machine Scheduling and Routing Problem
The job shop scheduling problem is defined as follows:
is the set of products which must be processed on machines;
is the set of machines.
The production process of each individual product consists of a set of tasks .
Each task must be performed on specific machine ;
is the set of tasks for machine ;
is the unit production cost for product ;
is the processing time of task ;
is the first task of product ;
is the last task of product ;
is the earliest starting time of product .
Lecture 12 9
Tasks must be scheduled on machines in such a way that the sequence of tasks
for each product satisfies precedence requirements.
Once the operation of a task has started it cannot be interrupted.
The goal is to determine a feasible schedule, such that each machine may only
process one task at a time and the total cost for production and transportation of
customer demands is minimized.
Decision variables:
0 denotes the starting time of the operation associated with task ;
0,1 equals to 1 iff task is executed before task ; these variables are de‐
fined for all pairs of tasks , processed on the same machine .
Lecture 12 10
Mathematical Model
min
1 , , , ;
, , , ;
, , , ;
, , ;
1 , , , ,
where and 0;
0, 0,1 , , , ;
and all constraints of VRPTW.
Hometask*. Design a model for the order batching and routing problem.
Lecture 12 11