School Bus Routing Problem with Open Offer Policy: incentive pricing strategy for students that opt-out using school bus

TL;DR

This paper proposes a novel incentive pricing strategy for school bus routing that encourages students to opt out, aiming to optimize capacity and reduce fleet size through a mathematical model and simulation analysis.

Contribution

It introduces the School Bus Routing Problem with Open Offer Policy and develops a mathematical formulation for incentive pricing to improve operational efficiency.

Findings

Incentive pricing can significantly reduce the number of buses needed.

The approach balances incentives and savings effectively.

Simulation results validate the model's practical applicability.

Abstract

This paper introduces the School Bus Routing Problem with Open Offer Policy (SBRP-OOP) that seeks to improve capacity usage and minimize the bus fleet by openly offering a monetary incentive to students willing to opt out of using a bus. We propose a mathematical formulation to determine a pricing strategy that balances the trade-off between incentive payments for students who choose not to use the bus with the expected savings obtained from operating fewer buses. To evaluate the effectiveness of the approach, we conducted simulations using both synthetic and real instances from a real operational context in the Williamsville Central School District (WCSD) of New York.