# What Is Route Optimization?

Written by BSM, a Geotab Company
on January 30, 2019

## What Is Route Optimization: The Problem of Routing and How It is Solved

The root question surrounding optimized fleet management is: ‘What is the most effective path for a vehicle to take, based on a set number of destinations, and outside variables?’ This core issue is one that has been the subject of significant study in the field of mathematics, and it is reflected in both the “Vehicle Routing Problem” and the “Traveling Salesman Problem.”

### The Vehicle Routing Problem

At its foundation, the “Vehicle Routing Problem,” or VRT, is simple: How does a fleet manager design delivery vehicle routes that go from a single starting point to a set of known locations and return, minimizing either distance traveled or cost? The VRT may seem a fairly straightforward calculation, but it is complicated by factors such as weight limits, driver rest periods, and active working hours for the starting point and the destinations.

### The Traveling Salesman Problem

The “Traveling Salesman Problem," or TSP, poses a very similar question to that of the Vehicle Routing Problem. Its goal is to determine the most efficient route a salesman can take through set locations or cities, with a single starting and ending point. Much like the Vehicle Routing Problem, it asks a simple question, but finding the solution becomes more difficult as the number of locations increases.

### The Solution: Route Optimization

Route optimization is the process of using software to find the most cost-efficient route, given specific parameters such as destinations, fleet size and costs. Route optimization solutions can quickly run various scenarios to find the best solution to a fleet’s routing needs.

Route optimization solves the Vehicle Routing Problem and Traveling Salesman Problem by answering the core question they pose, which is to identify the best route. Vehicle routing software, such as BSM's routing solution, help fleet managers make the most of fleet resources and their own time. Even better, it can do so while taking into consideration the many nuances of route efficiency.

These factors are seemingly small details that can have a significant impact on the end result. They include everything from the number of intersections, amount of traffic congestion by time and best access to each destination. Included in route optimization calculation, these details can greatly influence the efficiency and fuel costs of a fleet.

By incorporating this level of complication — and this range of data points — route optimization tools can provide a more nuanced and accurate solution to the Vehicle Routing and Traveling Salesman Problems. Yet, far more than a theoretical query, the answers to these problems have real-world implications. By implementing BSM,  a Geotab Company's routing software, our clients have seen significant benefits in the following areas:

1. Reduced fuel cost
2. Reduce overtime costs
3. Reduced planning time
4. Reduced windshield time
5. Higher on-time arrival rate
6. Increased customer satisfaction
7. Higher operational efficiencies

This post is part of our Smart Routing Series and includes the following posts:

Route Optimization Giving Fleets a Competitive Edge

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