PLANNING FOR TRUCK FLEET SIZE IN THE PRESENCE OF A COMMON‐CARRIER OPTION

Abstract

This paper considers a class of network optimization problems in which certain directed arcs must be covered by a set of cycles. Our study was motivated by a distribution planning problem of a commercial firm that had to make deliveries over several origin‐destination pairs (directed arcs) and that could service any demand arc by using a vehicle in its own fleet or by paying a common carrier. The problem is to determine an optimal fleet size and the resulting vehicle routes while satisfying maximum route‐time restrictions. We formulate the problem, describe some approximate solution strategies, and discuss important implementation issues.