The Dynamic Pickup and Allocation with Fairness Problem

Abstract

Urban logistic applications that involve pickup and distribution of goods require making routing and allocation decisions with respect to a set of sites. In cases where the supply quantities and the time in which they become available are unknown in advance, these decisions must be determined in real time based on information that arrives gradually. Furthermore, in many applications that satisfy the described setting, fair allocation is desired in addition to system effectiveness. In this paper, we consider the problem of determining a vehicle route that visits two types of sites in any order: pickup points (PPs), from which the vehicle collects supplies, and demand points (DPs), to which these supplies are delivered. The supply quantities offered by each PP are uncertain, and the information on their value arrives gradually over time. We model this problem as a stochastic dynamic routing and resource allocation problem, with the aim of delivering as many goods as possible while obtaining equitable allocations to DPs. We present a Markov decision process formulation for the problem; however, it suffers from the curse of dimensionality. Therefore, we develop a heuristic framework that presents a novel combination of operations research and machine learning and is applicable for many dynamic stochastic combinatorial optimization problems. Specifically, we use a large neighborhood search (LNS) to explore possible decisions combined with a neural network (NN) model that approximates the future value given any state and action. We present a new reinforcement learning method to train the NN when the decision space is too large to enumerate. A numerical experiment with 38 to 180 site instances, based on data from the Berlin Foodbank and randomly generated data sets, confirms that the heuristic obtains solutions that are on average approximately 28.2%, 41.6%, and 57.9% better than three benchmark solutions. Funding: This research was partially supported by the Israel Science Foundation [Grant 463/15], by the Shlomo Shmeltzer Institute for Smart Transportation at Tel Aviv University, by the Israeli Smart Transportation Research Center (ISTRC), and by the Council for Higher Education in Israel (VATAT). Supplemental Material: The online appendix is available at https://doi.org/10.1287/trsc.2023.0228 .