Optimizing Real Time Decision Making
JeanFrancoisPuget 2700028FGP Visits (6401)
Why would a taxi company ever wait before dispatching cars to calling customers? The answer may surprise you: it is for decreasing customer waiting time.
Yes, you read it correctly: they wait before responding in order to decrease customer waiting time.
I'm not making this up. It is precisely what a customer of ours, a taxi company, is doing.
The answer looks quite counter intuitive, isn't it? Let's use a simple example to explain why it makes sense. It is a simplified view of what dispatchers at taxi companies do. Their task is to assign cars to incoming customer calls, so that the customer waiting time is minimized. Basically, it amounts to dispatch the idle car closest to the customer calling in.
Let's have a look at a simplified world where everything happens on a line (as opposed t our 3D world). Assume we have two idle cars waiting for customers, and that customers call in. A real time decision making approach would assign the car closest to each customer as soon as they call. What would happen is depicted in the left of Figure 1.
Another option is to wait a bit, till several orders are booked, and only then assign cars globally. What would happen is depicted on the right of Figure 1.
We see that in the former case we end up covering much more mileage than in the latter case. Client 1 will wait much longer too.
Figure 1. A taxi dispatch example
The value of waiting before acting should now be clear. It is because several decisions are made simultaneously that the overall efficiency is improved. In our case, the taxi company is using mathematical optimization to dispatch cars while minimizing a mix of the average waiting time and the maximum waiting time. They do this optimization regularly, ever few seconds.
As a result waiting time is effectively reduced for customers. And empty car mileage is also decreased for taxi drivers. It is definitely a win win situation.
If we step back a bit, we see that the value of optimization comes from handling several decisions at the same time. This has been discussed in previous posts, including What is T