Location routing problem with delivery modes

Junko Hosoda and Takashi Irohara

International Journal of Logistics Systems and Management, 2020, vol. 36, issue 3, 370-384

Abstract: To realise efficient delivery, the location routing problem (LRP), which determines the locations of the facility and the vehicle routes, needs to be solved. Previous studies have attempted to improve the delivery efficiency of a route delivery, which is an efficient delivery mode if customers are densely located. However, if customers are sparsely located, route delivery is not efficient because the fixed costs of the vehicle become too expensive. In this case, courier delivery, i.e., delivery by a third party, is more efficient than route delivery because the courier delivery costs are proportional to the weight of the delivery amount and delivery distance. In this paper, we extended the LRP model to add the courier delivery model. Our model can select a suitable delivery mode for each customer by evaluating the trade-off between the courier delivery costs and the route delivery costs. The results of numerical experiments are shown.

Keywords: location routing problem; LRP; delivery mode; mixed integer programming; MIP; courier delivery. (search for similar items in EconPapers)
Date: 2020
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