Operations Research, Systems Engineering and Industrial Engineering Commons^™

A State Aggregation Approach For Stochastic Multiperiod Last-Mile Ride-Sharing Problems, Lucas Agussurja, Shih-Fen Cheng, Hoong Chuin Lau

Research Collection School Of Computing and Information Systems

The arrangement of last-mile services is playing an increasingly important role in making public transport more accessible. We study the use of ridesharing in satisfying last-mile demands with the assumption that demands are uncertain and come in batches. The most important contribution of our paper is a two-level Markov decision process framework that is capable of generating a vehicle-dispatching policy for the aforementioned service. We introduce state summarization, representative states, and sample-based cost estimation as major approximation techniques in making our approach scalable. We show that our approach converges and solution quality improves as sample size increases. We also apply …