A heuristic algorithm for a multi-product four-layer capacitated location-routing problem

Abstract

The purpose of this study is to solve a complex multi-product four-layer capacitated location-routing problem (LRP) in which two specific constraints are taken into account: 1) plants have limited production capacity, and 2) central depots have limited capacity for storing and transshipping products. The LRP represents a multi-product four-layer distribution network that consists of plants, central depots, regional depots, and customers. A heuristic algorithm is developed to solve the four-layer LRP. The heuristic uses GRASP (Greedy Randomized Adaptive Search Procedure) and two probabilistic tabu search strategies of intensification and diversification to tackle the problem. Results show that the heuristic solves the problem effectively.

Keywords

• Location-Routing Problem (LRP)
• Distribution Network
• GRASP (Greedy Randomized Adaptive Search Procedure)
• Tabu Search