Annals of Operations Research

, Volume 134, Issue 1, pp 153–181

Solving the Vehicle Routing Problem with Stochastic Demands using the Cross-Entropy Method


DOI: 10.1007/s10479-005-5729-7

Cite this article as:
Chepuri, K. & Homem-de-Mello, T. Ann Oper Res (2005) 134: 153. doi:10.1007/s10479-005-5729-7


An alternate formulation of the classical vehicle routing problem with stochastic demands (VRPSD) is considered. We propose a new heuristic method to solve the problem, based on the Cross-Entropy method. In order to better estimate the objective function at each point in the domain, we incorporate Monte Carlo sampling. This creates many practical issues, especially the decision as to when to draw new samples and how many samples to use. We also develop a framework for obtaining exact solutions and tight lower bounds for the problem under various conditions, which include specific families of demand distributions. This is used to assess the performance of the algorithm. Finally, numerical results are presented for various problem instances to illustrate the ideas.

Key words

vehicle routing problemstochastic optimizationcross-entropy method

Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Decision Analysis & Portfolio ManagementJ&J PRDTitusvile
  2. 2.Department of Industrial Engineering and Management SciencesNorthwestern UniversityEvanston