The encyclopedia · Engineering & Operations · Operational decision · 1980–1987
Mobil dispatched its whole tank-truck fleet with integer programming, live
Mobil's computer-assisted dispatch optimizes every truck assignment in about a second, nationwide.
Mobil Oil Corporation
The solution
Mobil's light petroleum distribution handled $4 billion in annual sales on 600,000 customer orders, using 120 bulk terminals and a fleet of more than 430 vehicles. Manual dispatch made every truck assignment a slow, costly judgment call.
The company adopted a completely integrated real-time system: order entry via audio response, automatic credit checking, delivery and billing, with computer-assisted dispatch as the heart. CAD, a collection of integer programming methods in a transaction-driven system, spends about one second optimizing each dispatch.
CAD works because it turns the dispatchers' accumulated experience into computable rules applied consistently nationwide. Mobil substantially reduced costs and dispatching staff while improving customer service.
Why it worked
- Real-time optimization matched the speed of order flow
- Dispatcher knowledge was encoded into the models
- Nationwide consolidation cut staff and cost
What can be applied
When decisions repeat thousands of times a day, embed the optimization in the transaction system itself instead of planning offline; the model learns the dispatchers' rules and scales them.
Aftermath
The system was a Franz Edelman Award winner in the 1986 competition and became a landmark example of embedded optimization in distribution.
Sources
- Real-Time, Wide Area Dispatch of Mobil Tank Trucks
- Real-Time, Wide Area Dispatch of Mobil Tank Trucks (abstract)
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