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Strategic placement of telemetry to reduce routing costs

Telemetry units can be used to track inventory levels at customers, helping suppliers get a better idea of when their customers require deliveries. In this article, we examine where to place a limited number of these units. To the best of our knowledge, this question has not been addressed in the literature. For each potential set of customers to have telemetry, our model considers several different realizations of when these customers would need deliveries and evaluates the cost of routing these customers in combination with those customers who do not have telemetry. We iteratively improve the set of customers with telemetry until we find the set with the lowest expected routing cost. In our computational experiments, we examine the performance of our model and the impact of different problem characteristics on the results.Copyright © 2014 Wiley Periodicals, Inc. NETWORKS, Vol. 63(3), 260–275 2014