Approximate Dynamic Programming Captures Fleet Operations for Schneider National

Hugo P. Simão (), Abraham George (), Warren B. Powell (), Ted Gifford (), John Nienow () and Jeff Day ()
Additional contact information
Hugo P. Simão: Princeton University, Princeton, New Jersey 08544
Abraham George: Princeton University, Princeton, New Jersey 08544
Warren B. Powell: Princeton University, Princeton, New Jersey 08544
Ted Gifford: Schneider National, Green Bay, Wisconsin 54306
John Nienow: Schneider National, Green Bay, Wisconsin 54306
Jeff Day: Schneider National, Green Bay, Wisconsin 54306

Interfaces, 2010, vol. 40, issue 5, 342-352

Abstract: Schneider National needed a simulation model that would capture the dynamics of its fleet of over 6,000 long-haul drivers to determine where the company should hire new drivers, estimate the impact of changes in work rules, find the best way to manage Canadian drivers, and experiment with new ways to get drivers home. It needed a model that could perform as well as its experienced team of dispatchers and fleet managers. In developing our model, we had to simulate drivers and loads at a high level of detail, capturing both complex dynamics and multiple forms of uncertainty. We used approximate dynamic programming to produce realistic, high-quality decisions that capture the ability of dispatchers to anticipate the future impact of decisions. The resulting model closely calibrated against Schneider's historical performance, giving the company the confidence to base major policy decisions on studies performed using the model. These policy decisions helped Schneider to avoid costs of $30 million by identifying problems with a new driver-management policy, achieve annual savings of $5 million by identifying the best driver domiciles, reduce the number of late deliveries by more than 50 percent by analyzing service commitment policies, and save $3.8 million annually by reducing training expenses for new border-crossing regulations.

Keywords: dynamic programming; transportation models; freight transportation; simulation (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://dx.doi.org/10.1287/inte.1100.0510 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:40:y:2010:i:5:p:342-352

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().