Developing the concept of pricing in a deterministic homogenous vehicle routing problem with comprehensive sensitivity analysis

Borna Rezaie, Farhad Esmaeili and Hamed Fazlollahtabar

International Journal of Services and Operations Management, 2012, vol. 12, issue 1, 20-34

Abstract: In this paper, a vehicle routing problem under product pricing circumstance is considered. Homogenous vehicles are considered to deliver a specific product from depots to customers in different cities. The objective is to determine the product price such that the profit of the vendor or producer is maximised satisfying the constraints of demand, delivery time, and transportation costs. The delivery capacity and price differentiation concept are also taken in consideration. A mathematical formulation is developed. The applicability of the proposed mathematical programme is illustrated using numerical experiments. Useful and practical sensitivity analyses are performed on the obtained results.

Keywords: vehicle routing problem; VRP; product pricing; revenue management; mathematical programming; sensitivity analysis; delivery capacity; price differentiation. (search for similar items in EconPapers)
Date: 2012
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