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Acceptance and Dispatching Policies for a Distribution Problem

Author

Listed:
  • Anton J. Kleywegt

    (School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30332-0205)

  • Jason D. Papastavrou

    (School of Industrial Engineering, Purdue University, West Lafayette, Indiana 47907-1287)

Abstract

A dynamic and stochastic distribution problem with a number of terminals and a fleet of vehicles is analyzed. Customers request the transportation of batches of loads between different origins and destinations. A request can be accepted or rejected; if the request is accepted, a reward is received. Holding costs for vehicles and loads at terminals as well as transportation costs are included in the model. The objective is to determine a policy for accepting transportation requests and for dispatching vehicles that maximizes the expected value (rewards minus costs) of operating the distribution system. A Markov decision process model is developed, optimal policies are characterized, and algorithms that exploit the structure of the problem are developed.

Suggested Citation

  • Anton J. Kleywegt & Jason D. Papastavrou, 1998. "Acceptance and Dispatching Policies for a Distribution Problem," Transportation Science, INFORMS, vol. 32(2), pages 127-141, May.
    • Handle: RePEc:inm:ortrsc:v:32:y:1998:i:2:p:127-141
    DOI: 10.1287/trsc.32.2.127
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    References listed on IDEAS

    as
    1. Daganzo, Carlos F., 1988. "A comparison of in-vehicle and out-of- vehicle freight consolidation strategies," Transportation Research Part B: Methodological, Elsevier, vol. 22(3), pages 173-180, June.
    2. Warren B. Powell, 1985. "Analysis of Vehicle Holding and Cancellation Strategies in Bulk Arrival, Bulk Service Queues," Transportation Science, INFORMS, vol. 19(4), pages 352-377, November.
    3. Alan S. Minkoff, 1993. "A Markov Decision Model and Decomposition Heuristic for Dynamic Vehicle Dispatching," Operations Research, INFORMS, vol. 41(1), pages 77-90, February.
    4. Warren B. Powell, 1986. "Iterative Algorithms for Bulk Arrival, Bulk Service Queues with Poisson and Non-Poisson Arrivals," Transportation Science, INFORMS, vol. 20(2), pages 65-79, May.
    5. Carlos F. Daganzo, 1987. "The Break-Bulk Role of Terminals in Many-to-Many Logistic Networks," Operations Research, INFORMS, vol. 35(4), pages 543-555, August.
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    Cited by:

    1. Al Hajj Hassan, Lama & Hewitt, Mike & Mahmassani, Hani S., 2022. "Daily load planning under different autonomous truck deployment scenarios," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    2. Miguel Andres Figliozzi & Hani S. Mahmassani & Patrick Jaillet, 2007. "Pricing in Dynamic Vehicle Routing Problems," Transportation Science, INFORMS, vol. 41(3), pages 302-318, August.
    3. van de Klundert, Joris & Otten, Bernhard, 2011. "Improving LTL truck load utilization on line," European Journal of Operational Research, Elsevier, vol. 210(2), pages 336-343, April.

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