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Solving the Vehicle Routing Problem with Stochastic Demands using the Cross-Entropy Method

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Abstract

An alternate formulation of the classical vehicle routing problem with stochastic demands (VRPSD) is considered. We propose a new heuristic method to solve the problem, based on the Cross-Entropy method. In order to better estimate the objective function at each point in the domain, we incorporate Monte Carlo sampling. This creates many practical issues, especially the decision as to when to draw new samples and how many samples to use. We also develop a framework for obtaining exact solutions and tight lower bounds for the problem under various conditions, which include specific families of demand distributions. This is used to assess the performance of the algorithm. Finally, numerical results are presented for various problem instances to illustrate the ideas.

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Authors and Affiliations

  1. Decision Analysis & Portfolio Management, J&J PRD, Titusvile, NJ, 08560

    Krishna Chepuri

  2. Department of Industrial Engineering and Management Sciences, Northwestern University, Evanston, IL, 60208

    Tito Homem-de-Mello

Authors
  1. Krishna Chepuri
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  2. Tito Homem-de-Mello
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Correspondence to Krishna Chepuri.

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Chepuri, K., Homem-de-Mello, T. Solving the Vehicle Routing Problem with Stochastic Demands using the Cross-Entropy Method. Ann Oper Res 134, 153–181 (2005). https://doi.org/10.1007/s10479-005-5729-7

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  • DOI: https://doi.org/10.1007/s10479-005-5729-7

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