A heuristic algorithm for the truckload and less-than-truckload problem

The delivery of goods from a warehouse to local customers is an important and practical problem of a logistics manager. In reality, we are facing the fluctuation of demand. When the total demand is greater than the whole capacity of owned trucks, the logistics managers may consider using an outsider carrier. Logistics managers can make a selection between a truckload (a private truck) and a less-than-truckload carrier (an outsider carrier). Selecting the right mode to transport a shipment may bring significant cost savings to the company. In this paper, we address the problem of routing a fixed number of trucks with limited capacity from a central warehouse to customers with known demand. The objective of this paper is developing a heuristic algorithm to route the private trucks and to make a selection of less-than-truckload carriers by minimizing a total cost function. Both the mathematical model and the heuristic algorithm are developed. Finally, some computational results and suggestions for future research are presented.