A simulation-based algorithm for the integrated location and routing problem in urban logistics

In most medium and large sized cities around the world, freight transportation operations might have a noticeable impact on urban traffic mobility as well as on city commercial activities. In order to reduce both traffic congestion and pollution levels, several initiatives have been traditionally implemented. One of the most common strategies concerns the allocation of urban distribution warehouses near the city center in order to consolidate freight delivery services. This paper considers the integrated problem of locating distribution centers in urban areas and the corresponding freight distribution (vehicle routing). The combined problem is solved by using a hybrid algorithm which employs Monte Carlo simulation to induce biased randomness into several stages of the optimization procedure. The approach is then validated using real-life data and comparing our results with results from other works already available in the existing literature.