Article ID: | iaor2001587 |
Country: | United States |
Volume: | 32 |
Issue: | 2 |
Start Page Number: | 127 |
End Page Number: | 141 |
Publication Date: | May 1998 |
Journal: | Transportation Science |
Authors: | Kleywegt A.J., Papastavrou J.D. |
Keywords: | transportation: general |
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.