THE EX-ANTE BENEFITS OF SOLVING VEHICLE-ROUTEING PROBLEMS

Management must decide whether or not to conduct an operational research study of any vehicle-routeing problems facing the organization. A key component of such a decision is the benefit that will result, e.g. shorter and faster routes, fewer vehicles and lower costs. This paper uses the results of previously published vehicle-routeing studies to forecast the benefits arising from such an operational research investigation. Since previous studies differ in a number of ways, multiple regression analysis is used to identify those factors associated with differences in the, easily quantified, benefits. It is found that, as problem complexity increases, the improvement of the operational research solution over the previous manual solution increases. Depending on the type of routeing problem and the unit of measurement, for an average-sized problem the ex-ante benefits range from 7% to 37%.