Recent Advances in Integrating Demand Management and Vehicle Routing: A Methodological Review

Abstract

In logistics and mobility services, new business models such as “attended home delivery”, “same-day delivery”, and “mobility-on-demand” have been successfully established over the last decade. They have in common that customers order online, while the services are provided offline. To make such online-to-offline services profitable, the efficient operation of a vehicle fleet is an essential prerequisite. Therefore, researchers began to explore approaches for integrating demand management and vehicle routing to support such operations, and a rapidly growing body of literature emerged. However, due to the diversity of existing business models, the analysis and comparison of decision problems and solution concepts are challenging, especially across applications, making the search for appropriate models and algorithms for new problem settings non-trivial.
Therefore, in this survey, we structure this innovative research area and review the existing literature from a methodological perspective. We present a generalized problem definition of integrated demand management and vehicle routing, derive a high-level formulation for the underlying sequential decision process, and present a corresponding mathematical model. We then describe and characterize solution concepts and algorithms from the literature in a structured way. We also present a tabular overview of the literature that connects applications and problem characteristics with solution concepts and allows researchers to quickly step through already studied combinations. Finally, we comment on the state-of-the-art from a cross-application perspective and discuss future research opportunities.

Keywords: Routing, Demand Management, Attended Home Delivery, Same-Day Delivery, Mobility-on-Demand