Using a Tuning Parameter to Compromise Computation Time and Shipping Cost in an MDVRP

Vehicle routing in last-mile delivery plays a decisive role in the new world of people’s lifestyles. At present, a growing number of people order their needs online, and this forces companies  to employ innovative delivery logistics to reduce their last-mile shipping costs. The goal is to minimize the cost of travel that depends on the Euclidean distance between customers. Companies require solving vehicle routing problems (VRP) in a reasonable time. In this paper, a new approach is introduced that solves the multi-depot vehicle routing problem (MDVRP) in real-time. We propose a new method by clustering and decomposing the main problem into smaller ones using a tuning parameter α . This approach could reduce the solution time noticeably (up to 95%) while the shipping cost is still reasonable.