Alternate solution procedures for the location-routing problem

The location-routing problem occurs in the context of physical distribution system design. Important elements in the design of a physical distribution system are location of depots and distribution of goods from depots to customers. Most research on the location of depots assumes that the distribution of goods from depots to customers occurs in a straight to-and-back manner while computing distribution costs, which is true only if the delivery to each customer is a truckload. For less than truckload (LTL) deliveries to customers, multiple customers are served in a single route. Thus, the true distribution costs are the route costs for all customers. The location-routing approach, which considers routing costs during the location of depots overcomes this deficiency. In this research, three new location-routing models are developed and compared. Their overall performance is evaluated in comparison to existing location-routing approaches based on location-allocation modeling, followed by routing on the allocated customer set. The results show the superior performance of the new location-routing models.