Location routing for small package shippers with subcontracting options

Location routing for small package shippers with subcontracting options

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Article ID: iaor20126202
Volume: 140
Issue: 2
Start Page Number: 702
End Page Number: 712
Publication Date: Dec 2012
Journal: International Journal of Production Economics
Authors: , , ,
Keywords: location, vehicle routing & scheduling, networks, combinatorial optimization
Abstract:

We present a location routing model that considers the requirements of real‐world small package shippers. It integrates the choice between self‐operating and subcontracting a depot. Furthermore, we consider the relocation costs which occur when established networks are restructured. We present a hybrid heuristic solution method based on simulated annealing for the location phase and variable neighborhood search for the routing. Through extensive numerical studies we show the competitiveness of our solution method on standard benchmarks and analyze the influence of subcontractors on the network design of a small package shipper.

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