DELIVERY PROBLEMS IN METROPOLITAN AREAS

OPTIMIZING THE DISTRIBUTION OF A DAILY NEWSPAPER: AN

APPLICATION TO THE TURIN DAILY "LA STAMPA"

G. Sciarrone

Centro Studi sui Sistemi di Trasporto SpA - Via Sallustiana 26 - 00187

Romo - ltalia

The paper reports on an application of a VRP-Vehicle Routing Problem -

heuristic for optimizing the distribution of the daily newspaper "La
Stampa" in the Turin urban area. The news-stands involved are about 400.
The service time limit is one and half hour within the exit of the daily
from the rotaries, but some news-stands must be serviced within half an
hour. Present service requires fifteen vehicles. The heuristic shows that
thirteen vehicles could suffice to deliver the daily within given time
constraints. The paper is organized as follows: Section 1 states the links
between the VRP and the overall logistic system. Section 2 briefly
surveys the literature about solution algorithms for the VRP.
Section 3 outlines the terms of the application to "La Stampa" and
describes the heuristic and its computer implementation. Section 4
reports the results achieved.

1. INTRODUCTION

The logistical system of a firm encompasses:

* the acquisition of the inputs to the production process
* the movement of raw materials and intermediate products to the
processing points forming the production process
* the movement of finished products from the plants to the
ultimate customer (distribution).
The third activity includes stocking the finished products, their
transportation to, if any, intermediate warehouses and the
distribution to the final customers.
In order to optimize the movement of finished products, it is
necessary to take a series of decisions of strategic nature (e.g.,
location and sizing of intermediate warehouses), of a tactical nature
L. Bianco et al. (eds.), Freight Transport Planning and Logistics
Springer-Verlag Berlin Heidelberg 1988
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(e.g., the size of the vehicle fleet required for transporting the
products to the intermediate depots and from there to the customers),
and of an operational nature (e.g., deciding the routes that the
vehicles have to follow in order to serve the patronage at the lowest
possible cost).
Naturally, the distinction between these types of decisions should
not be taken too literally, in that decisions at various levels interact to
a greater or lesser extent.
There is, for instance, an obvious interaction (this is the case we are
most interested in) between the size of the vehicle fleet and the lowest
cost routes that the vehicles must follow for the distribution of
finished products to the customers.
This paper is concerned with the last link of the logistical chain, i.e.
the distribution of finished products to customers, and, in particular,
with the problem of the size of the vehicle fleet for the distribution
and with the building of the vehicles routes.
Naturally, the proposed method may be applied, with due changes, to
other areas too, as, for instance, milk distribution, urban waste
collection, etc ..

2. ROUTING PROBLEM: GENERALITIES

What follows is a brief survey of the VRP - Vehicle Routing Problem

- solution algorithms which does not aim to be complete. Current
research topics as backhauling, pickup and delivery, inventory!
routing and the like are not cited, as well as computational issues. The
focus of this very brief survey is on heuristic rather than exact
optimal algorithms.
A generic routing problem can be described as follows:
* Vehicle fleet: one or more vehicles (most applications regard a
fleet of more than one vehicle. This assumption is followed
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thorughout the paper)

* Type of vehicles: same or different capacity
* Vehicle depot location: one or more depots
* Type of demand: known in advance or not
* Type of network: with oriented or not oriented arcs
* Limits on the time allowed for the completion of each route
* Limits on time intervals for delivery and/or collection (time
windows) 1
* Type of operation: delivery only, collection only or both
* Type of objective: to minimise the number of vehicles needed
respecting time and capacity constraints, to minimize the total
time (or other measures of "cost") of the service given the
number of vehicles.
It is possible to say that routing problems have been studied since
the last century, though not, of course, with an application-oriented
approach like today.
The ancestor of these problems is the so-called Traveling Salesman
Problem (TSP), which has a great practical importance still today,
where the traveling salesman has to visit every town in his area just
once and return to the city from which he left. The problem here is,
of course, that of identifying the shortest route in terms of distance,
travel time or whatever. Routing problems differ from the TSP in that
there is a maximum time limit and a limit on the capacity of the
vehicles used.
As a concept, routing problem are very simple.
If one images having to build a single route serving n collection or
delivery points from a depot with one vehicle, the most obvious way to
singling out the shortest route, consists of listing all the possible
permutations of the n points, calculating the time (or another

1 For instance, if a delivery to a customer can only be made between 7.00 hrs.
and 8,00 hrs., or else not after 9.00 hrs. The first case is an example of a
"Two-sides time window", the second of a "One-sided time window".
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measure of "cost") needed for each route (permutation) verifying that

the time and capacity limits have been respected, and choosing the
shortest. It is equally obvious that this course of action is extremely
impractical. In fact, even for problems of minor dimension, say about
twenty points, the number of possible permutations (routes) is 20!
Even on a mainframe, it will take a very long time for computing the
travel time of every possible route.
Since the 1960s, when attempts were made to solve these problems
with the use of computers, two approaches were applied: the first,
based on combinatorial optimization methods; the second based on
heuristic algorithms.
Combinatorial, or discrete, optimization, is that branch of
mathematical programming which is concerned with problems with a
finite, possibly very large, number of possible solutions. Within the
methods of combinatorial optmization can be cited those of integer
programming, dynamic programming and those designed for solving
particular combinatorial problems like assignment, matching, etc ..
With the first approach optimal solutions can be reached, but
computation times can be prohibitive, even on mainframes, in the
case of large problems and/or special constraints. Further, one may
asks if the effort needed to obtain an optimal solution is worthwhile
in the face of approximations, measurement errors, etc. always
involved in the data base construction.
With the second approach, one has to give up reaching an optimal
solution, but computation times are greatly cutted down.
A good heuristic may however attain solutions very near to the
optimal one. Golden et al. (1985) report on the performance of some
well known heuristics on some test problems. It results that the best
heuristics give solutions that are worse from 5% to 10% with respect
to the optimal one. If used in composite procedures with so called
tour-improvement algorithms, the difference with respect to the
optimal solution decreases to 2%-3%.
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Heuristic algorithms start from an original idea which may even

just be based on common sense, in order to reach a sub-optimal
solution. Generally speaking the logic behind this approach, and also,
to some extent, behind the methods of combinatorial optimization, is
that of designing a procedure that considers only "reasonable" routes,
avoiding wasting time on obviously non optimal routes.
Today, after years of study and experimentation several heuristics
are available, some of which are very sophisticated, relying on
results of graph theory.
Parallel to this, a new research field has been developed, regarding
the analysis and evaluation of the performance of the heuristics,
following three directions:
* the analysis of performance in terms of computation time,
quality of the final solution, etc., resulting from the application
of the heuristics to a series of test problems; Golden et al. (1985);
* worst case analysis; Christofides (1976), Solomon (1986). In this
case one attempts to identify the maximum possible difference
between the optimal solution and that of the heuristic. As said
above, heuristics try to consider only reasonable routes
between which to choose the best, but "reasonabless" cannot
guarantee that one or more good routes will not be checked at
all during the execution of the algorithm. It may well be that
for some bad conditioned problems, the heuristics gives a
solution very far from the optimal one. So it is important to try
to analyse these "worst cases" with the aim of quantify, for a
given heuristic, the maximum difference between its solution
and the optimal one.
* probabilistic analysis; Marchetti Spaccamela et al. (1984),
Psaraftis (1984). Assuming in advance a particular probability
distribution of VRP instances one attempts to derive a
relationship between the difference with respect to the optimal
solution and the number of collection/delivery points. Loosely
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speaking, it is something like the analysis of the asymptotic

properties of estimators in statistics and econometrics.
For an excellent review of optimal and heuristic algorithms
updated to 1983, see Bodin et a1. (1983). See also Christofides
(1985) and Mole (1979).
Briefly, most of the heuristics used for solving routing
problems can be classified as follows:
* "Cluster first-route second"
First, a number of clusters of points is formed corresponding to
the number of routes which one thinks to use and then routes
are created inside each cluster. The main reasoning behind this
approach is that, by creating clusters, it is in fact possible to
reduce the size of the problem and, as a result, computation
times.
Examples of this approach are the "Sweep" of Gillett and Miller
(1974), Fisher and Jaikumar (1981), the "two phase" algorithm of
Christofides et a1. (1979, 1986)
* "Route first-cluster second"
first of all a single route is created serving all the points and
then that route is dis aggregated into as many routes as one
intends to use, considering of course time and capacity limits.
Examples of this approach can be found in Beasley (1983),
Golden et a1. (1984)
* "Route construction"
with this approach the routes are put together one at a time
sequentially or all together in parallel, starting from the depot,
and adding one point at a time to the route(s) under
construction according to several criteria, checking every time
for the violation of time and capacity constraints.
Examples of this approach are the "Savings" of Clarke and
Wright (1964); Chapleau et a1. (1984), Hart and Shogan (1987);
Golden, Magnanti, and Nguyen (1977), Mole and Jameson (1976).
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There are many ways to build a route but the key ingredients
(Golden and Stewart, 1985) are generally:
- an initial subtour or a starting point
a selection criterion (which point to select for entering into the
emerging route)
- an insertion criterion (where to insert in the emerging route
the selected customer
Many selection/insertion criteria have been proposed: farthest
insertion, nearest insertion, arbitrary insertion and other
In the latest years other heuristics have been proposed that maybe
do not exactly fit in the broad classification above. Examples are the
"Simulated annealing" (Kikpatrick et al. 1983, Golden and Skiscim
1986) who exploits concepts borrowed by statistical physics and that to
the best of our knowledge has been applied only to the TSP and the
use of spacefilling curves (Bartholdy and Platzman, 1982).
One a route has been built it is very worthwhile to attempt to
improve it by a so called route improvement procedure. The most used
are the so-called edge or branch exchange or local search procedures
of which the best still seems to be that of Lin (1965) and Lin and
Kernighan (1973) which originally proposed it as a route
construction heuristic starting from a randomly chosen route and
systematically trying to improve it by exchanging two, three, ... r,
edges in the route with other edges not in the route. The procedure
stops when no feasible exchanges can be found that improve the
current solution. Another route construction procedure based on
iterative improvement of an initial solution can be found in Waters
( 1987).
A route improvement procedure is worth implementing it also
because, as Tovey (1981) has shown, the number of local optima in
combinatorial optimization rises exponentially with n, the number of
points.
However, the number of ways in which r edges in the current route
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may be exchanged with r edges not in the route, also grows rapidly
with r (and of course so does the computing time). As a result
exchanges of two edges (two-opt) and three edges (three-opt) are the
most used.
In the latest years a good deal of research has been devoted to try to
decrease the number of edge-exchanges to test without decreasing the
quality of the solution. The first successful attempt is due to Or (1976)
who considers only a small percentage of the possible exchanges in a
three-opt and nevertheless attains a solution of a quality comparable
to it, but with a far less computation time.
So far the discussion refers to a single route, but the procedure can
be widened to exchanges between routes.
Further, point exchanges can be performed instead of edge
exchanges (Dror and Levy, 1986).

3. A CASE STUDY: THE DISTRIBUTION OF THE DAILY "LA

STAMPA" IN THE CITY OF TURIN

3.1 The Terms of the Problem

The application described hereafter refers to the distribution of the

daily newspaper "La Stampa" in the urban area of Turin (about 1
million inhabitants).
In brief, the terms of the problem are as follows:
* number of delivery points: 401 news-stands
* number of depots: 1 (La Stampa head-office)
* number of vehicles currently used: 15
* maximum time for the deliverying of the daily: Ih 30'
* maximum vehicle capacity: 10,000 dailys (for every vehicle)
* departure of vehicles from La Stampa head office: staggered
* demand of single news-stands: known
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* one sided time windows: yes. some news-stands must be served

before a certain hour
It should however be observed that the problem cannot be framed in
such a rigid way.
With respect to the terms listed (base-terms), there could be
variations also of a large degree, in particular for the time limit
within which the news-stands must be served (maximum service
time) and for the demand of the single news-stands.
The service time is the interval between the daily's exit from the
rotary machines and the last time within which it must be delivered
to the news-stands. Possible breakdowns due to failures or other
causes to the rotary machines work, delay the daily's exit and hence
shrink the service time.
The demand of the single news-stands, which in working days is
different from the one in weekends and in holidays, can vary even in
the same working days due to particular events which cause the
number of copies printed to be increased (during the year 1986 La
Stampa has distributed up to 160,000 copies a day against an average
daily demand of 120,000 copies).
Hence the objective of the work was to build up an operational tool
which could supply a solution to the base-problem but which should
also be sufficiently flexible as to permit the definition of the daily's
distribution strategies different from the base one in occasion of
particular events.

3.2 The Method Adopted for Solving the Problem

For what said before, the basic criterion for choosing the method for
solving the problem was that the algorithm had to run on a personal
computer in a reasonable computation time. This meant excluding all
methods based on combinatorial optimization, which require, as
mentioned above, lengthy computation times for large dimension
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problems, as is the case in the following application.

The method adopted for solving the problem belongs to the class of
"Cluster first-route second".
In the first stage of the algorithm, clusters of news-stands have to
be formed. To this end, a number of "seed" news-stands corresponding
to the hypothesized number of vehicles has to be identified according
to the following procedure:
Step 1 the first seed news-stand (i) is the farthest from "La Stampa"
head office
Step 2 choose as second seed news-stand U) the one which is farthest
from the first.
Step 3 choose the third seed news-stand (k) such that:
dist (i,k) + dist U,k) is maximum over all the news-stands not already
chosen as seeds and with the constraint that the news-stand k must
have a distance from the seeds already chosen above a prespecified
threshold value.
Step 4 choose the fourth seed news-stand (k+1) such that:
dist (i,k+1) + dist U,k+1) + dist (k, k, + 1) is maximum over all the
news-stands not already chosen as seeds and with the constraint that
the news-stand k + 1 must have a distance from the seeds already
chosen above a prespecified threshold value.
And so on until all seeds have been chosen.
All the news-stands nearest to a given seed (in terms of travel time
on the actual road network) are assigned to that seed until the vehicle
capacity limit is reached and this for each seed news-stand.
Once the clusters have been formed the routes can then be created.
A quite good and reliable procedure is that of using a good route
building heuristic and improve the route thus obtained by using a
branch exchange procedure.
From an empirical analysis made by Golden et al. (1985) (and from
the literature quoted therein), it appears that the best heuristic used
for building a route is the "Farthest Insertion" which is described
 344

below:
Step 1 start the route with "La Stampa" head office (s)
Step 2 find news-stand i such that dist (s ,i) is maximum, where
dist (s,i) is the "distance" (here travel time) betwen sand i
Step 3 given a subroute, find news-stand h not included in the
subroute and news-stand k already in the subroute, such that:
dist (k,h) = maxj (mini (dist (i,j)
where j denotes a news-stand not in the subroute and i a news-stand
in the subroute
Step 4 find the arc (i ,j) in the subroute such that:
ins (iJ) = minij (dist (i,k) + dist (k,j) - dist (i,j
where ins (i,j) is the cost (here in terms of travel time) of inserting
news-stand k between news-stands i and j in the subroute
Step 5 verify time and capacity constraints. If both are satisfied and
there are other news-stands in the cluster .not yet in the subroute, go
to step 3. Otherwise start a new route in another cluster. If there are
no more cluster stop.
As regards route improvement procedures Lin's two-opt with Or
implementation has been used.
It should be noted that practically all the algorithms proposed up
today for building or improving routes, refer to the TSP-framework
in which the salesman, after visiting all the towns, in our case news-
stands, just once and only once, goes back to the town from where he
left, in our case liLa Stampa" head office.
In fact, after completing the distribution of the news-papers, the
vehicles must indeed to return to the head office, but the maximum
service time limit applies for reaching the news-stands and not for
returning to head office.
Consequently, the route building and improving heuristics have
been modified in such a way as to minimize a route leaving from a
given point (liLa Stampa" head office), but not ending at "La Stampa"
again but at the last news-stand served.
 345

Once the routes for all clusters of news-stands have been created, it
may be that the maximum service time has not been respected for one
or more clusters.
In this case a between routes node exchange procedure for
reassigning news-stands from one cluster to another according to
certain criteria is started, in order to verify whether it is possible to
find a feasible solution. The procedure is implemented even if all the
clusters are feasible with the aim of improving the solution.
The heuristic ends either when a feasible solution has been found,
or when the various possibilities of switching the news-stands from
cluster to cluster have been used up without finding a feasible
solution. In this case the algorithm is given a new run after
increasing the vehicle fleet by one unit.
Another characteristics of the heuristic stems from the above
mentioned circumstance that the vehicles do not all leave together. In
other words, the maximum service time was considered to vary from
vehicle to vehicle.
Two versions of the heuristic have been created. In the first one, the
news-stands needing to be serviced not after a certain hour (one-
sided time window) were not taken into account, as was the case in the
second version.
The one-sided time windows brought about a further modification of
the heuristic used. Algorithms for dealing with tight time windows
problems has been proposed and tested by Baker and Schaffer (1986),
Kolen et a1. (1987) and Solomon (1987). Work in the related area of the
dial-a-ride problem has been done by Psaraftis (1983).

3.3 Data Base Construction

Travel time matrix between news-stands

The basic factor is the distance between news-stands, from which it
is possible to work out the travel times.
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There are two possible methods: in the first the news-stands

coordinates are established and the euclidean distances (" as the crow
flies") are calculated; from those data the travel times are estimated on
the basis of average speed and coefficientes relating to the degree of
winding of the roads. By the second method the distance are measured
directly on a geographical map at a suitable scale, following the
actual course of the roads. This method takes more time, but is
undoubtedly more precise and was chosen for this reason.
The distance matrix between the news-stands was created by
measuring on a 1:5000 scale map the road distances between group of
neighbouring news-stands and between some of them and other ones
belonging to other groups. There would have been no point in
measuring the distances between all the news-stands, such as, for
instance, one located north of Turin and another in the south, in view
of the fact that they could never belong to the same route.
For sake of thoroughness, however, the distance matrix was
completed using a shortest path algorithm for the missing distances.
A survey was then carried out aboard the vehicles distributing "La
Stamp a" , measuring the actual travel times between the news-stands
along current routes and the offloading times of the newspapers at
each news-stand.
A regression analysis of the relationship between actual travel
times and distances between news-stand made it possible to establish a
piece-wise linear approximation of the relation between speed and
distance between news-stands which was used to create the news-
stands' travel time matrix. It is also possible, in view of the fact that
the coordinates of all the news-stands have been put on the computer,
to assume variable speeds, and therefore travel times, in relation to
the particular area where a news-stands is located (e.g. downtown or
outskirts).
Other input data used for the heuristic
Other input data, supplied obviously by liLa Stampa", include the
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average working day number of copies supplied to each news-stand,

vehicle capacity in terms of daily's copies, maximum service time and
departure frequency of the vehicles from "La Stampa" head office.

3.4 EDP Implementation

The heuristic was programmed in Pascal on an IBM/AT with 512 Kb

RAM and 20 Mb on hard disk, of which 2 Mb were actually needed for
this application. In order to make the algorithm run with 512 Kb it
was necessary to solve not trivial EDP problems. The mathematical
coprocessor is not essential. Computation time without mathematical
coprocessor is only slightly longer than with it used.
The code also includes:
* a graphics module for visualizing the routes on the computer's
screen
* a module for data base management, in order to provide for
possible modifications to the data, such as addition or deletion of
news-stands, variations in the number of copies required, etc.
Graphics is nowadays widely recognized as a key component for a
successful implementation of an heuristic.
Some heuristics use interactive graphics tools for allowing users to
refine and improve routes displayed on the computer's monitor
(Belardo et al. 1985, Sorenson 1986).
Computation times
Computation times are linked to the degree of tightness of the
constraints. If the service time limit, for instance, is not very close
(in minutes) to the minimum value allowed for finding a feasible
solution given the fleet size, vehicle capacity, etc., the code runs in
15-20 seconds. If, otherwise, the time limit is set very close to the
minimum value allowed for the problem, computation times are in the
order of minutes.
Those values are clearly acceptable. It should also be noted that the
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maximum service time is to some extent a decision variable in as much

as a firm may find it acceptable to go slightly over the maximum
service time, if this makes it possible to save a vehicle.

3.5 How the Code Works

The code was designed to work in an interactive way. A main menu

is offered to the user, guiding him through the various modules of the
code:
* route construction
* route display on the screen
* data base modifications
* print-outs
Each function has its own special sub-menu. The code presently
supplies the following output for each route:
* code number of the news-stands included in the route in the
order in which they are serviced by the vehicles
* cumulative number of the copies delivered
* cumulative travel time
and also the total travel time and number of copies delivered to all
news-stands and the display of the routes on the screen.
This structure makes it very easy to use the program for
interactively identifying the system's optimal state (fleet size and
time/capacity constraints) and/or simulating the way in which
service can be modified if there is a variation in demand or a change
in traffic conditions, etc..

4. CONCLUSIONS

The results obtained are undoubtedly satisfying. The heuristic makes

it possible to reduce total travel time by about 7% compared to current
 349

routes. It must not be thought that this result is not significant. First
of all, the results of exercises of this kind depend clearly on the
current level of service. In this case whoever worked out the routes
for "La Stampa" vehicles did obviously a good job.
Another result worth mentioning is that the routes produced by the
heuristic are more balanced than the present routes in terms of
travel times as well as number of copies per vehicle. Further, the
heuristic made it possible to verify, and this is the most significant
point, that the current service could be carried out with 13 vehicles
instead of the 15 presently used.
In other words, service productivity can be increased by almost 15%.

ACKNOWLEDGEMENTS
The Author wishes to thank Dr. Marco Zannier, Mr. Daniele Conca
and Prof. Alfredo Rizzi for their contribution to the application
discussed in section 3.2.

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