Improving a multi-echelon last mile delivery system by effective solution methods based on ant colony optimization

Abstract

The Covid-19 pandemic has significantly impacted consumer behavior and commerce, prompting a shift towards online goods and services. The surge in demand has led to inefficiencies and disruptions, especially in the last-mile delivery (LMD) process. Because of the LMD, the final stage of the supply chain, plays a crucial role in transporting goods from businesses to consumers, challenges such as the cost inefficiencies of direct home delivery have underscored the need for innovative solutions. In this study, the collection delivery points (CDPs) approach was adopted instead of direct home delivery. It focuses on addressing these challenges by adopting service points as dynamic CDPs and handling the problem as a dynamic location routing problem (DLRP). Two solutions approaches are proposed, to select candidate depots strategically and determine efficient route configurations, to aim to minimize travel distance. One of them is a two-phased hierarchical method that starts with clustering and continues with an Ant Colony Optimization (ACO) based-hybrid algorithm, and the other one is based solely on an ACO-based hybrid algorithm. The performance of these approaches is evaluated on modified benchmark instances from the literature. It has been observed that the ACO based-hybrid algorithm is more successful in terms of total travel distance, and if an evaluation is made in terms of the number of routes, it is recommended that the results of the two-phased hierarchical method should also be considered. Furthermore, a real word case study was conducted with the proposed methods and the results were compared from different perspectives. The results corroborate the findings regarding benchmark instances, thereby providing additional validation to the results obtained.

Keywords

• last mile delivery
• dynamic location routing problem
• ant colony optimization
• clustering analysis