Potential benefits of carrier collaboration in vehicle routing problem with pickup and delivery
Bhavya Padmanabhan, Nathan Huynh, William G. Ferrell, Vishal Badyal
Abstract
This paper investigates the potential benefits of collaboration among less than truckload (LTL) carriers in fulfilling pickup and delivery jobs. It adopts the commonly used centralized collaborative planning scheme where a central authority pools all jobs and allocate them to the carriers with the objective of minimizing the total transportation cost. However, in this study, LTL carriers are allowed to retain some of the jobs. This extension to the centralized planning scheme is necessary to make collaboration practical. When the carriers are allowed to retain some of their jobs, the allocation of the pooled jobs by the central authority is more complex because it needs to consider the location of the retained jobs. To this end, a mathematical model and a solution method based on large neighborhood search (LNS) are proposed. The experimental results from hypothetical networks provide several important insights regarding cost savings for various collaboration scenarios.