Dynamic location-routeing problems

Dynamic location-routeing problems involve the determination of the least-cost sequence of depot, vehicle fleet and route configurations in a distribution system, over a given planning horizon. This paper presents two solution approaches to such problems. The first is an exact method which is appropriate for small-scale problems. It consists of representing the problem by a suitable network and of solving to optimality an integer linear programme associated with the network. In the second approach, some of the system costs are approximated, and a global solution is then obtained by determining a shortest path on a directed graph. Under some hypotheses, this approach is suitable for large-scale problems. It is illustrated on a simple example.