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The vehicle routing problem with service level constraints

Teobaldo Bulhões, Minh Hoàng Hà, Rafael Martinelli and Thibaut Vidal

European Journal of Operational Research, 2018, vol. 265, issue 2, 544-558

Abstract: We consider a vehicle routing problem which seeks to minimize cost subject to service level constraints on several groups of deliveries. This problem captures some essential challenges faced by a logistics provider which operates transportation services for a limited number of partners and should respect contractual obligations on service levels. The problem also generalizes several important classes of vehicle routing problems with profits. To solve it, we propose a compact mathematical formulation, a branch-and-price algorithm, and a hybrid genetic algorithm with population management, which relies on problem-tailored solution representation, crossover and local search operators, as well as an adaptive penalization mechanism establishing a good balance between service levels and costs. Our computational experiments show that the proposed heuristic returns very high-quality solutions for this difficult problem, matches all optimal solutions found for small and medium-scale benchmark instances, and improves upon existing algorithms for two important special cases: the vehicle routing problem with private fleet and common carrier, and the capacitated profitable tour problem. The branch-and-price algorithm also produces new optimal solutions for all three problems.

Keywords: Routing; Collaborative logistics; Service level constraints; Integer programming; Genetic algorithms (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ejores:v:265:y:2018:i:2:p:544-558