With headquarters in Houston, Texas, Waste Management, Inc. (a Fortune 100 company), is the leading provider of comprehensive waste-management services in North America. Its network of operations includes 293 active landfill disposal sites, 16 waste-to-energy plants, 72 landfill gas-to-energy facilities, 146 recycling plants, 346 transfer stations, and 435 collection operations (depots) to provide services to nearly 20 million residential customers and 2 million commercial customers throughout the United States and Canada. The company’s collection-and-transfer vehicles need to follow nearly 20,000 daily routes. With an annual operating cost of nearly $120,000 per vehicle, management wanted to have a comprehensive route-management system that would make every route as profitable and efficient as possible. Therefore, a management science team that included a number of consultants was formed to attack this problem. The heart of the route-management system developed by this team is a huge mixed BIP model that optimizes the routes assigned to the respective collection-and-transfer vehicles. Although the objective function takes several factors into account, the primary goal is the minimization of total travel time. The main decision variables are binary variables that equal 1 if the route assigned to a particular vehicle includes a particular possible leg and that equal 0 otherwise. A geographical information system (GIS) provides the data about the distance and time required to go between any two points. All of this is imbedded within a Web-based Java application that is integrated with the company’s other systems. It is estimated that the recent implementation of this comprehensive route-management system will increase the company’s cash flow by $648 million over a five-year period, largely because of savings of $498 million in operational expenses over this same period. It also is providing better customer service.
For this problem please read the Summary for Waste Management, then write a 5-7 line summary, including both the financial and non-financial benefits