Optimization in the car-hauling industry

Abstract

This paper studies optimization opportunities in the U.S. car hauling industry specifically targeting idle miles. We developed a mathematical model that defines the optimal order of transportation tasks needed to minimize idle miles. Real data was collected from a U. S.car-hauling company to build the model. A numerical optimization using evolutionary algorithm and Excel Solver was performed on multiple scenarios. Significant improvement can be seen through route optimization. In one scenario the total route distance was decreased from 2997 km to 1897 km and the carrier’s profit increased from $189 to $1291. In another scenario, the total distance of all routes was decreased from 2578 km to 1742 km and the negative profit of -$194 turned into a positive $648. Optimization effectively reduces idle mileage in the car hauling industry. Both profit maximizing and idle-cost minimizing produce nearly identical efficient routes.