A variable neighborhood descent based heuristic to solve the capacitated location-routing problem

Abstract

Location-routing problem (LRP) is established as a new research area in the context of location analysis. The primary concern of LRP is on locating facilities and routing of vehicles among established facilities and existing demand points. In this work, we address the capacitated LRP which arises in many practical applications within logistics and supply chain management. The objective is to minimize the overall system costs which include the fixed costs of opening depots and using vehicles at each depot site, and the variable costs associated with delivery activities. A novel heuristic is proposed which is based on variable neighborhood descent (VND) algorithm to solve the resulted problem. The computational study indicates that the proposed VND based heuristic is highly competitive with the existing solution algorithms in terms of solution quality.

Keywords

• Location-Routing
• Logistics
• Supply Chain Management
• Meta-heuristics
• Variable Neighborhood Descent