Territorial design for customers with demand frequency

Lu Zhen, Jiajing Gao, Zheyi Tan, Gilbert Laporte and Roberto Baldacci

European Journal of Operational Research, 2023, vol. 309, issue 1, 82-101

Abstract: Territorial design is an important long-term decision for urban delivery service companies, in contexts where customers are partitioned into districts. This study focuses on a territorial design problem given the demand frequency of each customer, i.e., the estimated percentage of days with demand, over the planning horizon. This study formulates a set partitioning model and designs a column generation based algorithm to solve the problem. The algorithm decomposes the original problem into a restricted master problem (RMP) and a series of pricing problems (PPs), each limited to one district. A dynamic programming based method is designed to solve the PPs efficiently. To further accelerate the solution processes of the PPs and of the RMP, some tailored strategies are also embedded within the algorithm. Numerical experiments are conducted to validate the contributions of the dynamic programming and of the acceleration strategies. Some tests based on real-world cases are also performed in order to derive some managerial insights to support the practitioners’ decisions on service territory design.

Keywords: OR in service industries; Territorial design problem; Set partitioning; Column generation (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:309:y:2023:i:1:p:82-101

DOI: 10.1016/j.ejor.2023.01.016

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