Priority-Based Heterogeneous Vehicle Routing Problem with Time Windows, Pickup and Delivery

As companies strive to achieve operational excellence, efficiently planning logistics activities including the scheduling of deliveries and vehicle routing has become the imperative rather than a choice. To that end, this paper addresses a practical instance of the well-known vehicle routing problem with time windows (VRPTW) that caters for the existing variation in the customers importance (through a priority index) as well as simultaneous pickup and delivery operations at different locations on a vehicle's designated route. Assuming a heterogeneous fleet of vehicles, a mixed integer programming model is devised which accounts for the trade-offs between time window violations, priority costs, and transportation costs. The model is solved to optimality for small instances involving 10, 15 and 20 customers using CPLEX optimizer. Computational experiments conducted under various settings of the problem parameters reveal that more vehicles are dispatched when greater emphasis is placed on timely deliveries. Moreover, fully adhering to the customers' priorities while meeting the prescribed time windows is a challenging task and may still result in delays when both service quality measures are considered simultaneously.