In 1959, American mathematicians George Dantzig and John Ramser proposed a question: “What is the optimal set of routes for a fleet of vehicles to traverse in order to deliver to a given set of customers?”
We’ve come a long way in the past 60 years in solving this problem. While other mathematical questions remain unsolved, Dantzig & Ramser’s Vehicle Routing Problem lies in the core of the modern route optimization algorithms. Moreover, these changes are not just theoretical – companies with more optimal route times could cut overhead, idle time, delivery costs, and save on fuel, all while reducing delivery times across sectors.
Route optimization’s major benefits depend, at the highest level, on whether you’re refining last-mile or line hauling operations. Let’s look at how this works in each of these two sectors that reveal the power of optimization – but first, a primer on the terminology.