A Model and Algorithm for the Courier Delivery Problem with Uncertainty

Authors:
Ilgaz Sungur;Yingtao Ren;Fernando Ordóòez;Maged Dessouky;Hongsheng Zhong
Affiliations:
Industrial and Systems Engineering, University of Southern California, Los Angeles, California 90089;Industrial and Systems Engineering, University of Southern California, Los Angeles, California 90089;Industrial and Systems Engineering, University of Southern California, Los Angeles, California 90089;Industrial and Systems Engineering, University of Southern California, Los Angeles, California 90089;UPS, Timonium, Maryland 21093
Venue:
Transportation Science
Year:
2010

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Abstract

We consider the courier delivery problem (CDP), a variant of the vehicle routing problem with time windows (VRPTW) in which customers appear probabilistically and their service times are uncertain. We use scenario-based stochastic programming with recourse to model the uncertainty in customers and robust optimization for the uncertainty in service times. Our proposed model generates a master plan and daily schedules by maximizing the coverage of customers and the similarity of routes in each scenario, while minimizing the total time spent by the couriers and the total earliness and lateness penalty. To solve large-scale problem instances, we develop an insertion-based solution heuristic, called master and daily scheduler (MADS), and a tabu search improvement procedure. The computational results show that our heuristic improves the similarity of routes and the lateness penalty at the expense of increased total time spent when compared to a solution of independently scheduling each day. Our experimental results also show improvements over current industry practice on two real-world data sets.