The performance of route modification and demand stabilization strategies in stochastic vehicle routing

A key concern in managing vehicle routing operations under stochastic deman ds is whether, on the basis of travel distance, route modification yields m aterially greater logistical efficiency than fixed routes. This research us es statistical calibration as the primary technique to develop a robust and tractable model for estimating this difference in logistical efficiency. B ased on features such as the models predictive accuracy and generalizabilit y, it constitutes a substantive improvement over existing models. The prese nt study also expands the range of predictive models relevant to vehicle ro uting under stochastic demands with models to estimate the transportation a nd inventory effects of persuading customers to stabilize their ordering pa tterns. (C) 1998 Elsevier Science Ltd. All rights reserved.