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Maximizing Profits for North American Van Lines' Truckload Division: A New Framework for Pricing and Operations

1988; Institute for Operations Research and the Management Sciences; Volume: 18; Issue: 1 Linguagem: Inglês

10.1287/inte.18.1.21

1526-551X

Warren B. Powell, Yosef Sheffi, Kenneth S. Nickerson, Kevin Butterbaugh, Susan Atherton,

Vehicle Routing Optimization Methods

The Commercial Transport Division of North American Van Lines dispatches thousands of trucks from customer origin to customer destination each week under high levels of demand uncertainty. Working closely with upper management, the project team developed a new type of network model for assigning drivers to loads. The model, LOADMAP, combines real-time information about drivers and loads with an elaborate forecast of future loads and truck activities to maximize profits and service. It provided management with a new understanding of the economics of truckload operations; integrated load evaluation, pricing, marketing, and load solicitation with truck and load assignment; and increased profits by an estimated $2.5 million annually, while providing a higher level of service.