Vehicle routing

The vehicle routing problem (VRP) is a combinatorial optimization and integer programming problem which asks "What is the optimal set of routes for a fleet of vehicles to traverse in order to deliver to a given set of customers?". It generalises the well-known travelling salesman problem (TSP). It first appeared in a paper by George Dantzig and John Ramser in 1959, in which first algorithmic approach was written and was applied to petrol deliveries. Often, the context is that of delivering goods located at a central depot to customers who have placed orders for such goods. The objective of the VRP is to minimize the total route cost. In 1964, Clarke and Wright improved on Dantzig and Ramser's approach using an effective greedy approach called the savings algorithm.

Determining the optimal solution to VRP is NP-hard, so the size of problems that can be solved, optimally, using mathematical programming or combinatorial optimization may be limited. Therefore, commercial solvers tend to use heuristics due to the size & frequency of real world VRPs they need to solve.

The VRP has many obvious applications in industry. In fact the use of computer optimization programs can give savings of 5% to a company as transportation is usually a significant component of the cost of a product (10%) - indeed the transportation sector makes up 10% of the EU's GDP. Consequently, any savings created by the VRP, even less than 5%, are significant.

The VRP concerns the service of a delivery company. How things are delivered from one or more depots which has a given set of home vehicles and operated by a set of drivers who can move on a given road network to a set of customers. It asks for a determination of a set of routes, S, (one route for each vehicle that must start and finish at its own depot) such that all customers' requirements and operational constraints are satisfied and the global transportation cost is minimized. This cost may be monetary, distance or otherwise.

The road network can be described using a graph where the arcs are roads and vertices are junctions between them. The arcs may be directed or undirected due to the possible presence of one way streets or different costs in each direction. Each arc has an associated cost which is generally its length or travel time which may be dependent on vehicle type.

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