The two-echelon capacitated vehicle routing problem: models and math-based heuristics

Multiechelon distribution systems are quite common in supply-chain and logistics. They are used by public administrations in their transportation and traffic planning strategies, as well as by companies, to model own distribution systems. In the literature, most of the studies address issues relating to the movement of flows throughout the system from their origins to their final destinations. Another recent trend is to focus on the management of the vehicle fleets required to provide transportation among different echelons. The aim of this paper is twofold. First, it introduces the family of two-echelon vehicle routing problems (VRPs), a term that broadly covers such settings, where the delivery from one or more depots to customers is managed by routing and consolidating freight through intermediate depots. Second, it considers in detail the basic version of two-echelon VRPs, the two-echelon capacitated VRP, which is an extension of the classical VRP in which the delivery is compulsorily delivered through intermediate depots, named satellites. A mathematical model for two-echelon capacitated VRP, some valid inequalities, and two math-heuristics based on the model are presented. Computational results of up to 50 customers and four satellites show the effectiveness of the methods developed

Practical extensions to the level of repair analysis

The level of repair analysis (lora) gives answers to three questions that are posed when deciding on how to maintain capital goods: 1) which components to repair upon failure and which to discard, 2) at which locations in the repair network to perform each type of repairs, and 3) at which locations in the network to deploy resources, such as test equipment. The goal is to achieve the lowest possible life cycle costs. Various models exist for the lora problem. However, these models tend to be restrictive in that specic business situations cannot be incorporated, for example, having repair equipment with a capacity restriction or the occurrence of unsuccessful repairs.We discuss and model various practically relevant extensions to an existing minimum cost \ud ow formulation for the lora problem. We show the added value of these model renements in an extensive numerical experiment

Integrated production-distribution systems : Trends and perspectives

During the last two decades, integrated production-distribution problems have attracted a great deal of attention in the operations research literature. Within a short period, a large number of papers have been published and the field has expanded dramatically. The purpose of this paper is to provide a comprehensive review of the existing literature by classifying the existing models into several different categories based on multiple characteristics. The paper also discusses some trends and list promising avenues for future research

Formulation and solution of a two-stage capacitated facility location problem with multilevel capacities

In this paper, the multi-product facility location problem in a two-stage supply chain is investigated. In this problem, the locations of depots (distribution centres) need to be determined along with their corresponding capacities. Moreover, the product flows from the plants to depots and onto customers must also be optimised. Here, plants have a production limit whereas potential depots have several possible capacity levels to choose from, which are defined as multilevel capacities. Plants must serve customer demands via depots. Two integer linear programming (ILP) models are introduced to solve the problem in order to minimise the fixed costs of opening depots and transportation costs. In the first model, the depot capacity is based on the maximum number of each product that can be stored whereas in the second one, the capacity is determined by the size (volume) of the depot. For large problems, the models are very difficult to solve using an exact method. Therefore, a matheuristic approach based on an aggregation approach and an exact method (ILP) is proposed in order to solve such problems. The methods are assessed using randomly generated data sets and existing data sets taken from the literature. The solutions obtained from the computational study confirm the effectiveness of the proposed matheuristic approach which outperforms the exact method. In addition, a case study arising from the wind energy sector in the UK is presented

A large neighbourhood based heuristic for two-echelon routing problems

In this paper, we address two optimisation problems arising in the context of city logistics and two-level transportation systems. The two-echelon vehicle routing problem and the two-echelon location routing problem seek to produce vehicle itineraries to deliver goods to customers, with transits through intermediate facilities. To efficiently solve these problems, we propose a hybrid metaheuristic which combines enumerative local searches with destroy-and-repair principles, as well as some tailored operators to optimise the selections of intermediate facilities. We conduct extensive computational experiments to investigate the contribution of these operators to the search performance, and measure the performance of the method on both problem classes. The proposed algorithm finds the current best known solutions, or better ones, for 95% of the two-echelon vehicle routing problem benchmark instances. Overall, for both problems, it achieves high-quality solutions within short computing times. Finally, for future reference, we resolve inconsistencies between different versions of benchmark instances, document their differences, and provide them all online in a unified format

A Design Methodology to Optimize Supply Chain Network Performance

Organizations are constantly looking for new ways to reduce costs while still providing high customer service levels to face stringent competitive environments and the ever- increasing market globalization. An alternative these organizations can pursue to respond to these challenges and to gain a competitive differentiation is to optimize their supply chain network (SCN). This research aims to develop an effective SCN design strategy to locate facilities (i.e., plants and distribution centers) and to balance the allocation of customers to these facilities to satisfy capacity limitations and customer demands with minimum total cost and maximum level of service. It is anticipated that the results of this research will improve the strategic decision making of a manufacturing firm when locating facilities or redesigning the SCN and allow decision makers to determine tradeoffs among the organization’s conflicting criteria

Redesign of Three-Echelon Multi-Commodity Distribution Network

This research studies the distribution network redesign of an actual electronics company. The problems are formulated based on multi-echelon capacitated Location Routing Problem (LRP) with two commodities: home products and service items. The objective function consists of three components: facility cost, closing cost of facility and transportation cost. We propose solution method based on clustering technique. The problem is decomposed into the Facility Location Allocation Problem (FLAP) and the Multi-Depot Vehicle Routing Problem (MDVRP). MDVRP is solved by clustering method and feed the results to the modified FLAP to allocate the demand nodes to facilities and configure all distribution networks, for the 2nd and 3rd echelon. The distribution is divided into five region zones. Previously, each region was operated independently but this research compares the solutions from solving each region independently and solving all five zones simultaneously. The results indicate that the proposed solution method can achieve computation time and total cost that are comparable to ones obtained from solving the problem to optimality. Exact approach can only solve small and medium problems, whereas the proposed solution method provides the acceptable solution of real-life largest problem in limit of computation time. Finally, we perform sensitivity analysis on the results