A bus scheduling problem with multiple objective functions and travel time constraint is to determine the allocation of buses to customer service requests minimizing the number of buses and travel costs under the travel time restriction for each bus. For the scheduling, we first represent the scheduling problem using a graph and develop a hierarchical approach. Second, we develop a mathematical model based algorithm for the scheduling problem including heuristic methods. We tested the performance of the algorithm on instances with real data. As a result, the total number of buses and travel costs are reduced over about 10% comparing with that of current practice at the company.