Optimizing for total costs in vehicle routing in urban areas

Abstract

Minimizing cost is one of the most important objectives for logistics service providers, and it is not clear how an emphasis on minimizing emissions impacts costs. Most methodologies for routing currently minimize distance or travel time. This paper compares total cost (based on driver and fuel costs), fuel consumption/emissions, distance, and travel time for routes resulting from optimizing each of those measures. We explore the impact of multiple factors on these measures as well as the structure of the routes. Our results suggest that companies need rich cost models and routing algorithms with path flexibility to truly minimize total costs.