Acceptance and Dispatching Policies for a Distribution Problem

Anton J. Kleywegt and Jason D. Papastavrou
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Anton J. Kleywegt: School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30332-0205
Jason D. Papastavrou: School of Industrial Engineering, Purdue University, West Lafayette, Indiana 47907-1287

Transportation Science, 1998, vol. 32, issue 2, 127-141

Abstract: A dynamic and stochastic distribution problem with a number of terminals and a fleet of vehicles is analyzed. Customers request the transportation of batches of loads between different origins and destinations. A request can be accepted or rejected; if the request is accepted, a reward is received. Holding costs for vehicles and loads at terminals as well as transportation costs are included in the model. The objective is to determine a policy for accepting transportation requests and for dispatching vehicles that maximizes the expected value (rewards minus costs) of operating the distribution system. A Markov decision process model is developed, optimal policies are characterized, and algorithms that exploit the structure of the problem are developed.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:32:y:1998:i:2:p:127-141

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