Adaptive granular local search heuristic for a dynamic vehicle routing problem

The advance of communication and information technologies based on satellite and wireless networks have allowed transportation companies to benefit from real-time information for dynamic vehicle routing with time windows. During daily operations, we consider the case in which customers can place requests such that their demand and location are stochastic variables. The time windows at Customer locations can be violated although lateness costs are incurred. The objective is to define a set of vehicle routes which are dynamically updated to accommodate new customers in order to maximize the expected profit. This is the difference between the total revenue and the sum of lateness costs and costs associated with the total distance traveled. The solution approach makes use of a new constructive heuristic that scatters vehicles in the service area and an adaptive granular local search procedure. The strategies of letting a vehicle wait, positioning a vehicle in a region where customers are likely to appear, and diverting a vehicle away from its current destination are integrated within a granular local search heuristic. The performance of the proposed approach is assessed in test problems based on real-life Brazilian transportation companies. (C) 2009 Elsevier Ltd. All rights reserved.