A Bi-Objective Robust Model for Location-Routing and Capacity Sharing in Districting Regions under Uncertainty

Abstract

One of the most important approaches that can lead to the creation of various advantagesfor enterprises is the districting regions into the service offering locations and the demandunits, which causes the increase in level of customers’ access to get the service. On theother hand, if vehicle routing is carried out in districting regions in order to deliver productsto customers, the planning of customer service can be improved. However, in none of theresearch conducted in the area of design supply chain, vehicle routing in districting regionshas been not investigated. Therefore, in the current study, a bi-objective mathematicalmodel is presented to simultaneously focus on districting regions, facility location–allocation, service sharing, intra-district service transfer and vehicle routing. The firstobjective function minimizes the total cost of designing the CLSC network, which includescosts of opening facility and vehicle routing. The second objective function minimizes themaximum volume of surplus demand from service providers in order to achieve anappropriate balance in demand volume across all regions. Moreover, a robust optimizationapproach is used to take into account uncertainty in some parameters of the proposedmodel. In addition, the validity of the proposed mathematical model and the proposedsolution has been investigated on a real case in the oil and gas industry.

Keywords

• keywords: location-routing
• districting regions
• capacity sharing
• robust optimization.