Solution Methods for Employee Pick-up and Drop-off Vehicle Routing Problems: A Case study of ABC Company

Abstract

Problem solving of arranging transportation routes to reduce costs at ABC company, which provides pick-up and drop-off services for 43 employees at 24 pick-up and drop-off points, under conditions of 1) using 5 shuttles (capacity 9 employees/shuttle)  2) duration not exceed 180 minutes/line. Methods to solve routing problems in this research are 1) Exact Approaches based on mathematical models and 2) various Heuristics (Saving Heuristic, Sweep Heuristic, Nearest Neighbor Heuristic and Nearest Insertion) combined with Extended Deming for selecting the best result of conditional Heuristics. The results of arranging transportation routes using Exact Approaches can reduce distance by 29.01%, reduce transportation costs by 25.11% and the best results meeting the conditions of using various Heuristics combined with Extended Deming is result of Saving Heuristic, which can reduce the distance by 27.54%, reduce transportation costs by 24.10% compared to the current routes.