Online simulation for a real‐time route dispatching problem

In this article we present an online simulation application for a decision problem that operates in real time, where products have to be dispatched from two depots to clients that are geographically distributed throughout the city. The system's behaviour is highly stochastic, due to the random behaviour of the client's demand (in time and space), and the random times of order preparation, travelling times of dispatchers (these are motorcycle drivers) and absence rate of drivers each day. A decision scheme is proposed that combines elements of vehicle routing with time windows, real‐time dispatching of drivers and online simulation, through which information on future events is considered in the decision‐making process. Two major conclusions are obtained when this scheme is applied to real data. First, we show that the proposed algorithm for order consolidation and route dispatching can be very advantageous from the point of view of logistics costs and quality of service. Second, we show that online simulation and, specifically, the Simulation‐based Real‐time Decision Making methodology (SRDM) can further improve the quality of the results. New ideas for further work are also proposed.