Planning sustainable routes: Economic, environmental and welfare concerns

Okan Dukkanci, Özlem Karsu and Bahar Y. Kara

European Journal of Operational Research, 2022, vol. 301, issue 1, 110-123

Abstract: We introduce a problem called the Sustainable Vehicle Routing Problem (SVRP) in which the sustainability notion is considered in terms of economic, environmental and social impacts. Inspired by real-world problems that large cargo companies face for their delivery decisions, we introduce a new facet to the classical vehicle routing problem by considering the welfare of all three stakeholders of the problem: an environmentally conscious company, the drivers, and the indistinguishable customers, as our setting assumes that all customers belong to the same delivery class. Thus, the proposed problem consists of three objective functions. The first one is to minimize the total fuel consumption and emission to represent the companies’ main economic and environmental concerns. The second one is to maximize total welfare of the drivers through a function that encourages equitable payment across drivers while encouraging low total driver cost and the third one is to maximize total welfare of the customers through a function that encourages fairness in terms of delivery times. The last two objectives are measured using slots for tour lengths and delivery times. We implement an efficient solution approach based on the ϵ-constraint scalarization to find the nondominated solutions of our triobjective optimization problem and present computational analysis that provide insights on the trade-off between the objectives. Our experiments demonstrate the potential of the suggested framework under the customer anonymity assumption to help decision makers make effective plans that all parties involved would give consent to.

Keywords: Routing; Sustainability; Multi-objective optimization; Fuel consumption; Customer and driver welfare (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:301:y:2022:i:1:p:110-123

DOI: 10.1016/j.ejor.2021.09.036

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