Waste collection inventory routing with non-stationary stochastic demands

We solve a rich routing problem inspired from practice, in which a heterogeneous fixed fleet is used for collecting recyclable waste from large containers over a finite planning horizon. Each container is equipped with a sensor that communicates its level at the start of the day. Given a history of observations, a forecasting model is used to estimate the expected demands and a forecasting error representing the level of uncertainty. The problem falls under the framework of the stochastic inventory routing problem and our main contribution is the modeling of the dynamic probability-based cost of container overflows and route failures over the planning horizon. We cast the problem as a mixed integer non-linear program and, to solve it, we develop an adaptive large neighborhood search algorithm that integrates a purpose-designed forecasting model, tested and validated on real data. We demonstrate the strength of our modeling approach on a set of rich inventory routing instances derived from real data coming from the canton of Geneva, Switzerland. Our approach significantly outperforms alternative deterministic policies in its ability to limit the occurrence of container overflows for the same routing cost. Finally, we show the benefit of a rolling horizon solution and derive lower and upper bounds on its cost. (C) 2019 Elsevier Ltd. All rights reserved.