Add Conclusion section
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\section{Conclusion}
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\label{con}
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\label{con}
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We conclude this paper by elaborating on how the findings are transferable
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to similar settings, providing some implications for a UDP's
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managers, and discussing further research opportunities.
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tex/5_con/2_generalizability.tex
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tex/5_con/2_generalizability.tex
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\subsection{Generalizability of the Methology and Findings}
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\label{generalizability}
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Whereas forecasting applications are always data-specific, the following
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aspects generalize to UDPs with ad-hoc transportation services:
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\begin{itemize}
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\item \textbf{Double Seasonality}:
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The double seasonality causes a periodicity $k$ too large to be modeled by
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classical models, and we adapt the STL method in the \textit{fnaive} model
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such that it "flexibly" fits a seasonal pattern changing in a non-trivial
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way over time.
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\item \textbf{Order Sparsity}:
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The intermittent time series resulting from gridification require simple
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methods like \textit{hsma} or \textit{trivial} that are not as susceptible
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to noise as more sophisticated ones.
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\item \textbf{Unified CV}:
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A CV unified around a whole day allows evaluating classical statistical and ML
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methods on the same scale.
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It is agnostic of both the type of the time series and retraining.
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\item \textbf{Error Measure}:
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Analogous to \cite{hyndman2006}, we emphasize the importance of choosing a
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consistent error measure, and argue for increased use of MASE.
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\end{itemize}
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tex/5_con/3_implications.tex
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tex/5_con/3_implications.tex
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\subsection{Managerial Implications}
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\label{implications}
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Even though zeitgeist claims that having more data is always better, our study
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shows this is not the case here:
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First, under certain circumstances, accuracy may go up with shorter training
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horizons.
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Second, none of the external data sources improves the accuracies.
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Somewhat surprisingly, despite ML-based methods` popularity in both business
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and academia in recent years, we must conclude that classical forecasting
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methods suffice to reach the best accuracy in our study.
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There is one case where ML-based methods are competitive in our case study:
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In a high demand pixel, if only about four to six weeks of past data is
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available, the \textit{vrfr} model outperformed the classical ones.
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So, we recommend trying out ML-based methods in such scenarios.
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In addition, with the \textit{hsma} and \textit{hets} models being the overall
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winners, incorporating real-time data is not beneficial, in particular,
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with more than six weeks of training material available.
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Lastly, with just \textit{hets}, that exhibits an accuracy comparable to
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\textit{hsma} for low and medium demand, our industry partner can likely
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schedule its shifts on an hourly basis one week in advance.
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This study gives rise to the following managerial implications.
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First, UDPs can implement readily available forecasting algorithms with limited
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effort.
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This, however, requires purposeful data collection and preparation by those
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companies, which, according to our study, is at least equally important as
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the selection of the forecasting algorithm, as becomes clear from
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investigating the impact of the length of the training horizon.
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Second, the benefits of moving from manual forecasting to automated forecasting
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include being able to pursue a predictive routing strategy and
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demand-adjusted shift scheduling.
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At the time the case study data was collected, our industry partner did not
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conduct any forecasting; the only forecasting-related activities were the
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shift managers scheduling the shifts one week in advance manually in
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spreadsheets.
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Thus, selecting the right forecasting algorithm according to the framework
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proposed in this study becomes a prerequisite to the much needed
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operational improvements UDPs need to achieve in their quest for
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profitability.
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In general, many UDPs launched in recent years are venture capital backed
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start-up companies that almost by definition do not have a strong
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grounding in operational excellence, and publications such as the ones by
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Uber are the exception rather than the rule.
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Our paper shows that forecasting the next couple of hours can already be
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implemented within the first year of a UDP's operations.
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Even if such forecasts could not be exploited by predictive routing (e.g., due
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to prolonged waiting times at restaurants), they would help monitoring the
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operations for exceptional events.
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Additionally, the shift planning may be automated saving as much as one shift
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manager per city.
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We emphasize that for the most part, our proposed forecasting system
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is calibrated automatically and no manual work by a data scientist is required.
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The only two parameters where assumptions need to be made are the pixel size
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and the time step.
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While they can only be optimized by the data scientist over time, the results in our
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empirical study suggest that a pixel size of $1~\text{km}^2$ and a time step of
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one hour are ideal.
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tex/5_con/4_further_research.tex
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tex/5_con/4_further_research.tex
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\subsection{Further Research}
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\label{further_research}
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Sub-sections \ref{overall_results} and \ref{fams} present the models' average
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performance.
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We did not research what is the best model in a given pixel on a given day.
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To answer this, a study finding an optimal number of outer validation days is
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neccessary.
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With the varying effect of the training horizon, this model selection is a
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two-dimensional grid search that is prone to overfitting due to the high
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noise in low count data.
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Except heuristics relating the ADD to the training horizon, we cannot say
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anything about that based on our study.
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\cite{lemke2010} and \cite{wang2009} show how, for example, a time series'
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characteristics may be used to select models.
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Thus, we suggest conducting more detailed analyses on how to incorporate model
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selection into our proposed forecasting system.
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Future research should also integrate our forecasting system into a predictive
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routing application and evaluate its business impact.
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This embeds our research into the vast literature on the VRP.
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Initially introduced by \cite{dantzig1959}, \gls{vrp}s are concerned with
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finding optimal routes serving customers.
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We refer to \cite{toth2014} for a comprehensive overview.
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The two variants relevant for the UDP case are the dynamic VRP and
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the pickup and delivery problem (\gls{pdp}).
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A VRP is dynamic if the data to solve a problem only becomes available
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as the operations are underway.
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\cite{thomas2010}, \cite{pillac2013}, and \cite{psaraftis2016} describe how
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technological advances, in particular, mobile technologies, have led to a
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renewed interest in research on dynamic VRPs, and
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\cite{berbeglia2010} provide a general overview.
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\cite{ichoua2006} and \cite{ferrucci2013} provide solution methods for
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simulation studies where they assume stochastic customer demand based on
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historical distributions.
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In both studies, dummy demand nodes are inserted into the VRP instance.
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Forecasts by our system extend this idea naturally as dummy nodes could be
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derived from point forecasts as well.
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The concrete case of a meal delivering UDP is contained in a recent
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literature stream started by \cite{ulmer2017} and extended by
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\cite{reyes2018} and \cite{yildiz2018}: They coin the term meal delivery
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routing problem (\gls{mdrp}).
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The MDRP is a special case of the dynamic PDP where the defining
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characteristic is that once a vehicle is scheduled, a modification of the
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route is inadmissible.
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