Authors
Yu Zhang, Zhenzhen Zhang, Andrew Lim, Melvyn Sim
Publication date
2021/3/22
Journal
Operations Research
Volume
69
Issue
2
Pages
469-485
Publisher
INFORMS
Description
Optimal routing solutions based on deterministic models usually fail to deliver promised on-time services in an uncertain real world, which can lead to the loss of customers and revenue. We study a vehicle routing problem with time windows (vrptw) toward the end of mitigating the risk of late customer arrivals as much as possible when travel times are based on empirical distributions. To prevent overfitting, we propose a distributionally robust optimization model that uses a Wasserstein distance–based ambiguity set to characterize ambiguous distributions that are close to the empirical distribution. Our model minimizes the decision criterion regarding delays, termed the service fulfillment risk index (sri), while limiting budgeted travel costs. The sri accounts for both the late arrival probability and its magnitude, captures the risk and ambiguity in travel times, and can be evaluated efficiently in closed form. Under the …
Total citations
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