At their most basic level, vehicle scheduling and routing methods are dichotomous: fixed routes and variable routes. In a “fixed route” system, vehicles follow a prescribed route each day and customer orders for that day are matched to the delivery route. The advantage of this system, to the customer, is that he/she knows the day and time of delivery, and he/she can plan accordingly. On the other hand, the system does not accommodate customers who require immediate delivery, unless by chance the vehicle was scheduled to be in their vicinity the same day or the day after the order was placed. In terms of efficiency, the “fixed route” system has fundamental shortcomings. It will only periodically happen that vehicle capacity and order levels, for a given day, will match exactly. On most occasions, vehicle capacity will be under-utilised or over-subscribed.
The “variable route” system is more customer oriented. This approach seeks to develop routes which match customer order patterns and is capable of amendment to meet fluctuations in day-to-day demand levels. Operating efficiency is improved since the number of drivers and vehicles on the road each day is determined by that day's order level and so total mileage and variable transport costs are minimised. However, there can be disadvantages of this system to customers since they are not always sure of the time and/or day of delivery.
It is sometimes possible to adopt a hybrid approach where a “variable route” system is operated within fixed geographical areas. Such an approach yields the benefits of both the fixed and variable routing system. Unfortunately, it does not overcome the problems of orders exceeding transport capacity, vehicle breakdowns or absenteeism on the part of drivers.