Strategic placement of telemetry units and locomotive fuel planning

Telemetry units can be used to gauge inventory levels at customers. These readings can help prevent both stockouts and unnecessary deliveries. The research problem we address is where to place a limited number of telemetry units in order to reduce routing costs. Modeling this problem involves the consideration of both inventory theory as well as vehicle routing concepts. We model this problem with an integer program but solve with heuristics. Our results demonstrate that significant savings can be found with limited numbers of telemetry units. We then extend our results to consider the impact of correlation of customer usage on the placement of telemetry units and show even greater savings can be obtained. We also present a model that can be used for locomotive fuel planning. It decides where fuel trucks should be located as well as the volume of the fuel that should be delivered to each locomotive.