Improving the Distribution of Industrial Gases with an On-Line Computerized Routing and Scheduling Optimizer

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Abstract
For Air Products and Chemicals, Inc., inventory management of industrial gases at customer locations is integrated with vehicle scheduling and dispatching. Their advanced decision support system includes on-line data entry functions, customer usage forecasting, a time/distance network with a shortest path algorithm to compute intercustomer travel times and distances, a mathematical optimization module to produce daily delivery schedules, and an interactive schedule change interface. The optimization module uses a sophisticated Lagrangian relaxation algorithm to solve mixed integer programs with up to 800,000 variables and 200,000 constraints to near optimality. The system, first implemented in October, 1981, has been saving between 6% to 10% of operating costs.

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