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Vehicle routing problem with zone-based pricing

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  • Afsar, Hasan Murat
  • Afsar, Sezin
  • Palacios, Juan José

Abstract

In this paper we study the vehicle routing problem with zone-based pricing where the transporter defines a service price for all customers in a geographical zone. Each customer accepts or rejects the transporter’s offer according to a personal threshold value. Once the customer accepts the offer, the delivery service becomes compulsory. Two decisions need to be made: the price per zone and the routing to serve all customers that accept that price. The objective is to maximize the profit, which is the difference of total service revenue and the routing costs. We present a mathematical model for the problem and propose a branch-and-price algorithm. A numerical analysis shows promising results on the proposed set of instances.

Suggested Citation

  • Afsar, Hasan Murat & Afsar, Sezin & Palacios, Juan José, 2021. "Vehicle routing problem with zone-based pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:transe:v:152:y:2021:i:c:s1366554521001514
    DOI: 10.1016/j.tre.2021.102383
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    2. Nikola Mardešić & Tomislav Erdelić & Tonči Carić & Marko Đurasević, 2023. "Review of Stochastic Dynamic Vehicle Routing in the Evolving Urban Logistics Environment," Mathematics, MDPI, vol. 12(1), pages 1-44, December.

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