Maximizing Profits for North American Van Lines' Truckload Division: A New Framework for Pricing and Operations

Warren B. Powell, Yosef Sheffi, Kenneth S. Nickerson, Kevin Butterbaugh and Susan Atherton
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Warren B. Powell: Department of Civil Engineering and Operations Research, Princeton University, Princeton, New Jersey 08544
Yosef Sheffi: Department of Civil Engineering, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
Kenneth S. Nickerson: Department of Operations Research, Stanford University, Stanford, California 94305
Kevin Butterbaugh: North American Van Lines---Commercial Transport Division, PO Box 988, Ft. Wayne, Indiana 46801
Susan Atherton: North American Van Lines---Information Services

Interfaces, 1988, vol. 18, issue 1, 21-41

Abstract: The Commercial Transport Division of North American Van Lines dispatches thousands of trucks from customer origin to customer destination each week under high levels of demand uncertainty. Working closely with upper management, the project team developed a new type of network model for assigning drivers to loads. The model, LOADMAP, combines real-time information about drivers and loads with an elaborate forecast of future loads and truck activities to maximize profits and service. It provided management with a new understanding of the economics of truckload operations; integrated load evaluation, pricing, marketing, and load solicitation with truck and load assignment; and increased profits by an estimated $2.5 million annually, while providing a higher level of service.

Keywords: transportation: road; networks/graphs: application (search for similar items in EconPapers)
Date: 1988
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