The location routing problem (LRP) unites two important challenges in the design of distribution systems. On the one hand, the delivery of goods to customers needs to be planned as effectively as possible, and on the other hand, the location of depots from where these deliveries are executed has to be determined carefully. The LRP is of particular importance when it comes to designing complex distribution systems in urban areas to answer questions like: “In which part of the city should micro-hubs be positioned” or “Where should depots be opened to optimize the distribution of parcels to customers?”
We investigated which properties optimally-located depots should have. Our findings led to the development of a highly-effective heuristic to solve a wide range of problems in which location decisions are paired with routing decisions: How to find the best depots among 1000 potential options? How to optimize supply chains with multiple echelons? If we made you curious, have a look at our working paper.
The first version of the corresponding Java program with interface can be downloaded here.