Optimization of a Two-Stage Distribution Network with Route Planning and Time Restrictions

Location and route planning are implemented independently in most distribution networks. In the majority of cases, low-quality solutions are obtained if sequential methods, e.g. Locate depots first and plan routes second, are used. In location-routing problems (LRPs), location and routing are solved simultaneously. The underlying basic problems are the well known facility location problem and the vehicle routing problem, which have been studied intensively over the last decades. This work extends a single-stage LRP to a two-stage distribution network, taking into account route planning and time restrictions, thus covering more realistic aspects, especially timing aspects, of many real-world problems. We present a tabu search approach for solving large-scale instances and compare its performance with a sequential approach.