Design and implementation of an interactive optimization system for network design in the motor carrier industry

The authors describe the design and implementation of an interactive optimization system for routing freight over a less-than-truckload motor carrier network. They formulate a very large, mixed integer programming problem, and develop a decomposition strategy based partly on the mathematical structure of the problem as well as a range of important, real-world issues and constraints. Then the authors develop and implement a local improvement heuristic in such a way as to keep the ‘man-in-the-loop’, using the analyst to make judgments regarding certain complex constraints and tradeoffs. Important aspects of the system include a range of modeling approximations to keep the problem tractable and the way the analyst evaluates the quality of the different numbers. The package was implemented and is currently being used on an ongoing basis by a major motor carrier. An overview of the major elements of the package is given as well as a summary of important implementation issues that arose during the three year project.