A decision support system of vehicle routing and refueling for motor carriers with time-sensitive demands

a r t i c l e i n f o Given the recent trend of raising fuel cost and the increased time-sensitiveness of shippers, an extensive pressure is placed on the motor-carrier industry to meet the time-constrained customer demands at minimum fuel cost. We propose a decision support system that allows motor carriers to route each vehicle such that the vehicle not only visits all the customers in time (without violating time windows), but also utilizes the " cheapest " gas stations (cheapest truck stops in the region) as refueling points during the tour. While this approach does not necessarily minimize a vehicle's fuel consumption, as it often suggests using non-shortest routes with cheap gas stations (truck stops), it allows the vehicle to reduce the unit cost of buying fuel. Computational testing shows that the proposed approach may attain up to 4.29% savings in fuel cost for motor carriers. U.S. motor carriers, including the asset-based third-party logistics companies (3PLs) and the shippers with private fleets, are currently facing a challenging business environment for two reasons. The first is the raising fuel cost. It is well known that, during the last few years, fuel prices have increased dramatically by more than 100%, and that thousands of U.S. motor carriers went bankrupt because of such price hikes (Transport Topics [13]). The second is the increased time-sensitiveness of customers. Because of the growing use of lean and just-in-time operations in the manufacturing sector (a major customer segment for motor carriers), many shippers are now imposing time-window constraints on their demands (Ohlmann and Thomas [9]). Hence, an extensive pressure is placed on motor carriers to dispatch their pickup and delivery vehicles in such a way that they can meet the time-sensitive customer demands at minimum fuel costs. Many carriers are using the following two strategies to cope with these challenges. The first is to reduce the fuel consumption of each vehicle by scheduling the customer visits such that the total travel distance during a tour can be minimized without violating time windows. This can be accomplished by using the techniques (and the software products) that solve the time-constrained vehicle routing problems (Bell and Griffis [1]). The second is to reduce the unit-cost of buying fuel (cost per gallon). This is usually accomplished by using the " purchase contract " strategy, in which a carrier makes a commitment to buy certain amounts of fuel …