The impact of fleet size on performance-based incentive management

Performance-based contracting (PBC) is envisioned to lower the asset ownership cost while ensuring desired system performance. System availability, widely used as a performance metric in such contracts, is affected by multiple factors such as equipment reliability, spares stock, fleet size, and service capacity. Prior studies have either focussed on ensuring parts availability or advocating the reliability allocation during design. This paper investigates a single echelon repairable inventory model in PBC. We focus on reliability improvement and its interaction with decisions affecting service time, taking into account the operating fleet size. The study shows that component reliability in a repairable inventory system is a function of the operating fleet size and service rate. A principal-agent model is further developed to evaluate the impact of the fleet size on the incentive mechanism design. The numerical study confirms that the fleet size plays a critical role in determining the penalty and cost sharing rates when the number of backorders is used as the negative incentive scheme.     

Optimal empty vehicle repositioning and fleet-sizing for two-depot service systems

This paper considers the problem of determining optimal control policies for empty vehicle repositioning and fleet-sizing in a two-depot service system with uncertainties in loaded vehicle arrival at depots and repositioning times for empty vehicles in the fleet. The objective is to minimise the sum of the costs incurred by vehicle maintenance, empty vehicle repositioning and vehicle leasing. A novel integrated model is presented. The optimal empty repositioning policy for a particular fleet size is shown to be of the threshold control type. The explicit form of the cost function under such threshold controls is obtained. The optimal threshold values and fleet-size are then derived. Numerical examples are given to demonstrate the results.     

The static bike relocation problem with multiple vehicles and visits

This paper introduces the static bike relocation problem with multiple vehicles and visits, the objective of which is to rebalance at minimum cost the stations of a bike sharing system using a fleet of vehicles. The vehicles have identical capacities and service time limits, and are allowed to visit the stations multiple times. We present an integer programming formulation, implemented under a branch-and-cut scheme, in addition to an iterated local search metaheuristic that employs efficient move evaluation procedures. Results of computational experiments on instances ranging from 10 to 200 vertices are provided and analyzed. We also examine the impact of the vehicle capacity and of the number of visits and vehicles on the performance of the proposed algorithms.     

A benders decomposition approach for an integrated airline schedule design and fleet assignment problem with flight retiming, schedule balance, and demand recapture

The airline’s ability to offer flight schedules that provide service to passengers at desired times in competitive markets, while matching demand with an aircraft fleet of suitable size and composition, can significantly impact its profits. In this spirit, optional flight legs can be considered to construct a profitable schedule by optimally selecting among such alternatives in concert with assigning the available aircraft fleet to all the scheduled legs. Examining itinerary-based demands as well as multiple fare-classes can effectively capture network effects and realistic demand patterns. In addition, allowing flexibility on the departure times of scheduled flight legs can increase connection opportunities for passengers, hence yielding robust schedules while saving fleet assignment costs within the framework of an integrated model. Airlines can also capture an adequate market share by balancing flight schedules throughout the day, and recapture considerations can contribute to more realistic accepted demand realizations. We therefore propose in this paper a model that integrates the schedule design and fleet assignment processes while considering flexible flight times, schedule balance, and recapture issues, along with optional legs, path/itinerary-based demands, and multiple fare-classes. A polyhedral analysis is conducted to generate several classes of valid inequalities, which are used along with suitable separation routines to tighten the model representation. Solution approaches are designed by applying Benders decomposition method to the resulting tightened model, and computational results are presented using real data obtained from United Airlines to demonstrate the efficacy of the proposed procedures.     

Single machine scheduling with two competing agents,arbitrary release dates and unit processing times

Rapid transit systems timetables are commonly designed to accommodate passenger demand in sections with the highest passenger load. However, disruptions frequently arise due to an increase in the demand, infrastructure incidences or as a consequence of fleet size reductions. All these circumstances give rise to unsupplied demand at certain stations, which generates passenger overloads in the available vehicles. The design of strategies that guarantee reasonable user waiting time with small increases of operation costs is now an important research topic. This paper proposes a tactical approach to determine optimal policies for dealing with such situations. Concretely, a short-turning strategy is analysed, where some vehicles perform short cycles in order to increase the frequency among certain stations of the lines and to equilibrate the train occupancy level. Turn-back points should be located and service offset should be determined with the objective of diminishing the passenger waiting time while preserving certain level of quality of service. Computational results and analysis for a real case study are provided.     

Optimizing reliability and service parts logistics for a time-varying installed base

Performance based contracting (PBC) emerges as a new after-sales service practice to support the operation and maintenance of capital equipment or systems. Under the PBC framework, the goal of the study is to increase the system operational availability while minimizing the logistics footprint through the design for reliability. We consider the situation where the number of installed systems randomly increases over the planning horizon, resulting in a non-stationary maintenance and repair demand. Renewal equation and Poisson process are used to estimate the aggregate fleet failures. We propose a dynamic stocking policy that adaptively replenishes the inventory to meet the time-varying parts demand. An optimization model is formulated and solved under a multi-phase adaptive inventory control policy. The study provides theoretical insights into the performance-driven service operation in the context of changing system fleet size due to new installations. Trade-offs between reliability design and inventory level are examined and compared in various shipment scenarios. Numerical examples drawn from semiconductor equipment industry are used to demonstrate the applicability and the performance of the proposed method.     

Fleet-sizing and service availability for a vehicle rental system via closed queueing networks

In this paper, we address the problem of determining the optimal fleet size for a vehicle rental company and derive analytical results for its relationship to vehicle availability at each rental station in the company’s network of locations. This work is motivated by the recent surge in interest for bicycle and electric car sharing systems, one example being the French program Vélib (2010). We first formulate a closed queueing network model of the system, obtained by viewing the system from the vehicle’s perspective. Using this framework, we are able to derive the asymptotic behavior of vehicle availability at an arbitrary rental station with respect to fleet size. These results allow us to analyze imbalances in the system and propose some basic principles for the design of system balancing methods. We then develop a profit-maximizing optimization problem for determining optimal fleet size. The large-scale nature of real-world systems results in computational difficulties in obtaining this exact solution, and so we provide an approximate formulation that is easier to solve and which becomes exact as the fleet size becomes large. To illustrate our findings and validate our solution methods, we provide numerical results on some sample networks.     

The multiple frequency delivery operations in the time-definite delivery industry

The pure hub-and-spoke network is an efficient network structure for time-definite freight delivery common carriers. Centres perform pickup and delivery functions, while hubs consolidate partial loads. This substantially reduces the transportation costs with only a small increase in the handling cost. In Taiwan, as well as in the US, carriers run their delivery operations once a day. As a result, the feeder fleet is under-utilized. This research studied the impact of multiple frequency delivery operations on the feeder fleet size. We formulated line-haul operations planning for multiple frequency delivery operations as an integer programme. We developed an α-optimal implicit enumeration algorithm and used two small networks from the third largest carrier in Taiwan for numerical testing. The results demonstrated a smaller feeder fleet size compared with the single frequency delivery operations.     

A System Dynamics Model of Submarine Operations and Maintenance Schedules

The extent to which a proposed military force will achieve operational objectives is a prime concern of defence planners. This paper discusses the problem in the context of the exercise of sea power in distant waters and shows that a model of the whole problem would require a feedback analysis, for which an appropriate approach would be system dynamics. Such models have, in general, been continuous, but ships are discrete objects. The paper therefore addresses the construction of discrete system dynamics models as the basis for a model of the whole problem. Two models of a submarine force are presented. The first deals with the construction and major refit programmes, to evaluate the periods of fleet service availability achievable from a submarine force of a given size. The second examines unit usage during periods of fleet service.     

Integer linear programming models for a cement delivery problem

We consider a cement delivery problem with an heterogeneous fleet of vehicles and several depots. The demands of the customers are typically larger than the capacity of the vehicles which means that most customers are visited several times. This is a split delivery vehicle routing problem with additional constraints. We first propose a two phase solution method that assigns deliveries to the vehicles, and then builds vehicle routes. Both subproblems are formulated as integer linear programming problems. We then show how to combine the two phases in a single integer linear program. Experiments on real life instances are performed to compare the performance of the two solution methods.     

Buffer sizing in multi-product multi-reactor batch processes: Impact of allocation and campaign sizing policies

This paper studies the impact of management policies, such as product allocation and campaign sizing, on the required size of the finished goods inventories in a multi-product multi-reactor batch process. Demand, setup and batch processing times for these products are assumed to be stochastic, and the inventory buffer for every product type needs to be such that target customer service levels are met. To perform this analysis, we develop a queueing model that allows us to explicitly estimate service levels as a function of the buffer size, and the allocation/campaign sizing policies. This model can be used to evaluate the service level given an existing buffer configuration, as well as to determine the buffer sizes required across products to meet a pre-specified service level. It also allows us to formulate a number of insights into how product allocation decisions and campaign planning policies affect buffer sizing decisions in symmetric production systems.     

Social forecasting for company planning: Brian C. TWISS (Ed.) Macmillan,London, 1982, xxv + 310 pages, £25.00

The transportation system considered in this paper has a number of vehicles with no capacity constraint, which take passengers from a source terminal to various destinations and return to the terminal. The trip times are considered to be independent and identically distributed random variables with a common exponential distribution. Passengers arrive at the terminal in accordance with a Poisson process. The system is operated under the following policy: when a vehicle is available and there are at least α passengers waiting for service, then a vehicle is dispatched immediately. The passenger queue length and waiting time distributions are obtained under steady-state conditions. System performance measures such as average passenger queue length and waiting time are then derived. A minimum average cost criterion is then used to determine the optimal fleet size and dispatching policy. This is a generalization of the results of Weiss for a single-vehicle system.     

Dynamic demand fulfillment in spare parts networks with multiple customer classes

We study real-time demand fulfillment for networks consisting of multiple local warehouses, where spare parts of expensive technical systems are kept on stock for customers with different service contracts. Each service contract specifies a maximum response time in case of a failure and hourly penalty costs for contract violations. Part requests can be fulfilled from multiple local warehouses via a regular delivery, or from an external source with ample capacity via an expensive emergency delivery. The objective is to minimize delivery cost and penalty cost by smartly allocating items from the available network stock to arriving part requests. We propose a dynamic allocation rule that belongs to the class of one-step lookahead policies. To approximate the optimal relative cost, we develop an iterative calculation scheme that estimates the expected total cost over an infinite time horizon, assuming that future demands are fulfilled according to a simple static allocation rule. In a series of numerical experiments, we compare our dynamic allocation rule with the optimal allocation rule, and a simple but widely used static allocation rule. We show that the dynamic allocation rule has a small optimality gap and that it achieves an average cost reduction of 7.9% compared to the static allocation rule on a large test bed containing problem instances of real-life size.     

A Scatter Search for the periodic capacitated arc routing problem

This paper considers the Periodic Capacitated Arc Routing Problem (PCARP), a natural extension of the well-known CARP to a multi-period horizon. Its objective is to assign a set of service days to each edge in a given network and to solve the resulting CARP for each period, in order to minimize the required fleet size and the total cost of the trips on the horizon. This new and very hard problem has various applications in periodic operations on street networks, like waste collection and sweeping. A greedy heuristic and a Scatter Search (SS) are developed and evaluated on two sets of PCARP instances derived from classical CARP benchmarks. The results show that the SS strongly improves its initial solutions and clearly outperforms the greedy heuristic. Preliminary lower bounds are also provided. As they are not sufficiently tight, the SS is also tested in the single-period case (CARP) for which tight bounds are available: in fact, it competes with one state-of-the-art metaheuristic proposed for the CARP.     

Dynamic routing in open queueing networks: Brownian models,cut constraints and resource pooling

We present an introductory review of recent work on the control of open queueing networks. We assume that customers of different types arrive at a network and pass through the system via one of several possible routes; the set of routes available to a customer depends on its type. A route through the network is an ordered set of service stations: a customer queues for service at each station on its route and then leaves the system. The two methods of control we consider are the routing of customers through the network, and the sequencing of service at the stations, and our aim is to minimize the number of customers in the system. We concentrate especially on the insights which can be obtained from heavy traffic analysis, and in particular from Harrison's Brownian network models. Our main conclusion is that in many respects dynamic routingsimplifies the behaviour of networks, and that under good control policies it may well be possible to model the aggregate behaviour of a network quite straightforwardly.Supported by SERC grant GR/F 94194.     

A two-pheromone trail ant colony system—tabu search approach for the heterogeneous vehicle routing problem with time windows and multiple products

This paper considers a practical variant of the Vehicle Routing Problem (VRP) known as the Heterogeneous Vehicle Routing Problem with Time Windows and Multiple Products (HVRPTWMP). As the problem is NP-hard, the resolution approach proposed here is a sequential Ant Colony System (ACS)—Tabu Search algorithm. The approach introduces a two pheromone trail strategy to accelerate agents’ (ants) learning process. Its convergence to good solutions is given in terms of fleet size and travel time while completing tours and service to all customers. The proposed procedure uses regency and frequency memories form Tabu Search to further improve the quality of solutions. Experiments are carried out using instances from literature and show the effectiveness of this procedure.     

Implicit depot assignments and rotations in vehicle routing heuristics

Vehicle routing variants with multiple depots and mixed fleet present intricate combinatorial aspects related to sequencing choices, vehicle type choices, depot choices, and depots positioning. This paper introduces a dynamic programming methodology for efficiently evaluating compound neighborhoods combining sequence-based moves with an optimal choice of vehicle and depot, and an optimal determination of the first customer to be visited in the route, called rotation. The assignment choices, making the richness of the problem, are thus no more addressed in the solution structure, but implicitly determined during each move evaluation. Two meta-heuristics relying on these concepts, an iterated local search and a hybrid genetic algorithm, are presented. Extensive computational experiments demonstrate the remarkable performance of these methods on classic benchmark instances for multi-depot vehicle routing problems with and without fleet mix, as well as the notable contribution of the implicit depot choice and positioning methods to the search performance. New state-of-the-art results are obtained for multi-depot vehicle routing problems (MDVRP), and multi-depot vehicle fleet mix problems (MDVFMP) with unconstrained fleet size. The proposed concepts are fairly general, and widely applicable to many other vehicle routing variants.     

Dynamic multi-priority,multi-class patient scheduling with stochastic service times

Efficient patient scheduling has significant operational, clinical and economical benefits on health care systems by not only increasing the timely access of patients to care but also reducing costs. However, patient scheduling is complex due to, among other aspects, the existence of multiple priority levels, the presence of multiple service requirements, and its stochastic nature. Patient appointment (allocation) scheduling refers to the assignment of specific appointment start times to a set of patients scheduled for a particular day while advance patient scheduling refers to the assignment of future appointment days to patients. These two problems have generally been addressed separately despite each being highly dependent on the form of the other. This paper develops a framework that incorporates stochastic service times into the advance scheduling problem as a first step towards bridging these two problems. In this way, we not only take into account the waiting time until the day of service but also the idle time/overtime of medical resources on the day of service. We first extend the current literature by providing theoretical and numerical results for the case with multi-class, multi-priority patients and deterministic service times. We then adapt the model to incorporate stochastic service times and perform a comprehensive numerical analysis on a number of scenarios, including a practical application. Results suggest that the advance scheduling policies based on deterministic service times cannot be easily improved upon by incorporating stochastic service times, a finding that has important implications for practice and future research on the combined problem.     

Operational Decisions in AGV-Served Flowshop Loops: Scheduling

This paper considers operational issues that arise in repetitive manufacturing systems served by automated guided vehicles (AGVs) in loops with unidirectional material flow. The objective considered is the minimization of the steady state cycle time required to produce a minimal job set (or equivalently, throughput rate maximization). Our models allow for delays caused by AGV conflicts. We define and analyze three nondominated and widely used AGV dispatching policies. For each policy, we describe algorithms and intractability results for combined job scheduling and material handling problems. We describe a genetic algorithm that estimates the cycle time within 5% on average for instances with up to 10 machines and four AGVs. Some related fleet sizing and loop decomposition issues are discussed in the companion paper [19].     

A deterministic tabu search algorithm for the fleet size and mix vehicle routing problem

The fleet size and mix vehicle routing problem consists of defining the type, the number of vehicles of each type, as well as the order in which to serve the customers with each vehicle when a company has to distribute goods to a set of customers geographically spread, with the objective of minimizing the total costs. In this paper, a heuristic algorithm based on tabu search is proposed and tested on several benchmark instances. The computational results show that the proposed algorithm produces high quality results within a reasonable computing time. Some new best solutions are reported for a set of test problems used in the literature.