United Parcel Service optimization of vehicle balance

Abstract

The paper summarizes the methods and results of a research and development effort performed by undergraduate students of the Department of Industrial and Systems Engineering (ISE) at Virginia Tech. The United Parcel Service (UPS) operates approximately an 1100 package car delivery fleet spread among 24 package (distribution) centers within their Virginia shipping district. The objective of this effort is to more optimally spread the UPS delivery fleet across the district to minimize fueling costs. UPS incurs a daily operating cost resulting primarily from the fueling of package cars. The reduction in fuel costs of the UPS fleet is ensured by matching the fuel efficiencies of different package cars to their delivery route lengths. A software tool was developed consisting of a linear program and a user interface that more optimally allocated the UPS fleet, resulting in met delivery requirements and a potential $180,000 annual savings in fleet fueling costs.