Districting and Vehicle Routing: Learning the Delivery Costs

Abstract

The districting-and-routing problem is a strategic problem in which basic geographical units (e.g., zip codes) should be aggregated into delivery regions, and each delivery region is characterized by a routing cost estimated over an extended planning horizon. The objective is to minimize the expected routing costs while ensuring regional separability through the definition of the districts. Repeatedly simulating routing costs on a set of scenarios while searching for good districts can be computationally intensive, so existing solution approaches for this problem rely on approximation functions. In contrast, we propose to rely on a graph neural network (GNN) trained on a set of demand scenarios, which is then used within an optimization approach to infer routing costs while solving the districting problem. Our computational experiments on various metropolitan areas show that the GNN produces accurate cost predictions. Moreover, using this better estimator during the search positively impacts the quality of the districting solutions and leads to 10.35% delivery-cost savings over the commonly-used Beardwood estimator and similar gains compared to other approximation methods.