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: | Vigo Daniele, Stenger Andreas, Schwind Michael, Schneider Michael |
Keywords: | location, vehicle routing & scheduling, networks, combinatorial optimization |
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.