An Integrated Heuristic for Vehicle Routing Problem with Two Stage Logistic System Considering Distribution Centers (A Case for Category-Freed Distribution)

In this paper, a new type of Vehicle Routing Problem in which distribution centers exist between factories and customers, is addressed. Each distribution center has no fixed category, which means all customers can be served from any distribution center. When demands occur, products are transported from factories to distribution centers by large fleets, and distributed to customers by small fleets. This results in an inter-dependent relationship between transportation and distribution. However, to take into consideration both transportation from factories to distribution centers and distribution from distribution centers to customers, the solution space becomes extremely large. Thus, it is utterly impracticable to solve the problem by using optimization. This paper, therefore, proposes an integrated heuristic using Tabu Search and Simulated Annealing with two-phase approaches to solve the problem. Numerical experiments has been carried out to demonstrate an effectiveness of the proposed technique.