Recent technological advances in communication systems now allow the exploitation of realtime information for dynamic vehicle routing and scheduling. It is possible, in particular, to consider diverting a vehicle away from its current destination in response to a new customer request. In this paper, a strategy for assigning customer requests, which includes diversion, is proposed, and various issues related to it are presented. An empirical evaluation of the proposed approach is performed within a previously reported tabu search heuristic. Simulations compare the tabu search heuristic, with and without the new strategy, on a dynamic problem motivated from a courier service application. The results demonstrate the potential savings that can be obtained through the application of the proposed approach. 426 In the past few years, there has been a rapid growth in communication and information technologies (e.g., global positioning satellites, cellular phones, geographic information systems, geosynchronous satellite-based systems, etc.). These recent

In the last decade, there has been an increasing body of research in dynamic vehicle routing problems. This article surveys the subclass of those problems called dynamic pickup and delivery problems, in which objects or people have to be collected and delivered in real time. It discusses some general issues as well as solution strategies.

We present the main freight transportation planning and management issues, briefly review the associated literature, describe a number of major developments, and identify trends and challenges. In order to keep the length of the paper within reasonable limits, we focus on long-haul, intercity, freight transportation. Optimization-based operations research methodologies are privileged. The paper starts with an overview of freight transportation systems and planning issues and continues with models which attempt to analyze multimodal, multicommodity transportation systems at the regional, national or global level. We then review location and network design formulations which are often associated with the long-term evolution of transportation systems and also appear prominently when service design issues are considered as described later on. Operational models and methods, particularly those aimed at the allocation and repositioning of resources such as empty vehicles, are then described....

This paper shows how to coordinate the decisions on pricing and fleet management of a freight carrier. We consider a setting where the carrier announces its prices at the beginning of a certain time horizon and the load arrivals over this horizon depend on the announced prices. Assuming that the vehicle fleet is managed according to a particular class of fleet management models, we present a tractable method to obtain sample path-based directional derivatives of the objective function with respect to the prices. We use this information to search for a good set of prices. Numerical experiments show that our approach yields high-quality solutions. Key words: dynamic fleet management; pricing; dynamic programming

This dissertation is dedicated to Sandy. Without you blocking all obstacles in front of me, as well as pushing me along gently from behind, I never could have achieved this dream. To “Four Whatevers”! Also, this dissertation is dedicated to Emily, Tyler, and Stephen. I promise that I will now start saying “Yes, I have time to do that with you ” much more often than before. Don’t ever forget that you can accomplish anything if you set your heart and mind to it.iii Acknowledgements Without the guidance, mentoring, and advice of my Advisor, Professor Karla Hoffman, this dissertation and this project would never have been attainable. Thank you Karla. Special thanks go to the President of DECISIVE ANALYTICS Corp., John Donnellon, who took the risk in funding this project, which has now become a software product called Pythagoras. Thanks to my fellow Directors, who supported me as this project moved along, albeit slower than originally anticipated. Also, thanks go to Matt, Dean, and Tom for the long hours they put in to turn this crazy idea into a reality, and to

This paper presents bounds for the expected recourse function for stochastic programs with network recourse. Cyclic recourse, a concept introduced by Wallace [18], allows the approximation of the recourse problem by restricting the optimal flows on a set of cycles and by augmenting the original network to induce separability. We introduce a new procedure that uses again a set of cycles but does not approximate the problem; instead it solves it heuristically without altering the original network or requiring separability. The method produces tighter bounds and is computationally feasible for large networks. Numerical experiments with selected networks illustrate the effectiveness of the approach. 1

Online models for real-time operations planning face a host of implementation issues that do not arise in more strategic arenas. We use the seemingly simple problem of assigning drivers to loads in the truckload motor carrier industry as an instance to study the issues that arise in the process of implementing a real-time dispatch system. Although the project was moderately successful, our focus is not on documenting the benefits, but rather on summarizing the challenges that arose. The most significant theme running through the implementation hurdles we encountered was the lack of information available to the model. Computers are very good at processing vast quantities of information; humans are very good at challenging the information that is in the computer and augmenting computer-provided data with head knowledge. Our study includes a careful comparison of actual decisions with model recommendations, using a six-month database of actual transactions. This comparison is the first we have seen of its kind and provides the most rigorous evaluation of an online dispatch model that we have seen. Although the model was well used, the results demonstrate that significant improvements could have been obtained if the level of model utilization had been even higher.

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We address a number of operational challenges encountered in two emerging types of practices in the procurement of truckload transportation services: collaboration and auctions. The main objective in these two types of procurement strategies is identifying and exploiting synergies between the lanes of a carrier's network. In shipper collaboration, we take the perspective of a shipper who collaborates with other shippers to seek synergy between his lanes and other participants' lanes. On the other hand, in procurement auctions, although we take the carriers' perspective in our work, a shipper tries to discover the carrier (or carriers) whose network has the most synergy with his lanes. The first part of the thesis concerns the solution of optimization problems arising in collaborative transportation procurement networks where a group of shippers comes together and jointly negotiates with carriers for the procurement of transportation services. Through collaboration, shippers may be able to identify and submit sequences of continuous loaded movements to carriers, reducing the carriers' need for repositioning, and thus lowering the carriers' costs. A portion of the carriers' cost savings may be returned to the shippers in the form of lower prices. We discuss optimization technology that helps identify repeatable, dedicated truckload continuous move tours with little truck repositioning. Timing considerations are critical to practical viability and are a key focus of our efforts. We demonstrate the effectiveness of our algorithms on randomly generated instances as well as on instances derived from real-world data. The second part concerns the pricing of transportation services offered by the trucking companies (carriers). We look at the bid determination problem faced by carriers in transportation procurement auctions where a shipper requests quotes from multiple carriers and purchases the services of the lowest bidder. The specific problem being studied is the bid valuation problem in the case where the carrier must place bids on multiple lanes simultaneously. We model the problem as a stochastic optimization problem and propose a coordinate search algorithm for solving this problem. Then, we conduct a simulation study to demonstrate the positive impact of the approach on carrier profits.

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