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A Benders decomposition-based approach for logistics service network design

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  • Belieres, Simon
  • Hewitt, Mike
  • Jozefowiez, Nicolas
  • Semet, Frédéric
  • Van Woensel, Tom

Abstract

We propose an exact solution method for a Logistics Service Network Design Problem (LSNDP) inspired by the management of restaurant supply chains. In this problem, a distributor seeks to source and fulfill customer orders of products (fruits, meat, napkins, etc.) through a multi-echelon distribution network consisting of supplier locations, warehouses, and customer locations in a cost-effective manner. As these products are small relative to vehicle capacity, an effective strategy for achieving low transportation costs is consolidation. Specifically, routing products so that vehicles transport multiple products at a time, with each product potentially sourced by a different supplier and destined for a different customer. As instances of this problem of sizes relevant to the operations of an industrial partner are too large for off-the-shelf optimization solvers, we propose a suite of techniques for enhancing a Benders decomposition-based algorithm, including a strengthened master problem, valid inequalities, and a heuristic. Together, these enhancements enable the resulting method to produce provably high-quality solutions to multiple variants of the problem in reasonable run-times.

Suggested Citation

  • Belieres, Simon & Hewitt, Mike & Jozefowiez, Nicolas & Semet, Frédéric & Van Woensel, Tom, 2020. "A Benders decomposition-based approach for logistics service network design," European Journal of Operational Research, Elsevier, vol. 286(2), pages 523-537.
    • Handle: RePEc:eee:ejores:v:286:y:2020:i:2:p:523-537
    DOI: 10.1016/j.ejor.2020.03.056
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    References listed on IDEAS

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    Cited by:

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    2. Morgan Swink & Kejia Hu & Xiande Zhao, 2022. "Analytics applications, limitations, and opportunities in restaurant supply chains," Production and Operations Management, Production and Operations Management Society, vol. 31(10), pages 3710-3726, October.
    3. Li, Siqiao & Zhu, Xiaoning & Shang, Pan & Li, Tianqi & Liu, Wenqian, 2023. "Optimizing a shared freight and passenger high-speed railway system: A multi-commodity flow formulation with Benders decomposition solution approach," Transportation Research Part B: Methodological, Elsevier, vol. 172(C), pages 1-31.
    4. Reddy, K. Nageswara & Kumar, Akhilesh & Choudhary, Alok & Cheng, T. C. Edwin, 2022. "Multi-period green reverse logistics network design: An improved Benders-decomposition-based heuristic approach," European Journal of Operational Research, Elsevier, vol. 303(2), pages 735-752.
    5. Belieres, Simon & Hewitt, Mike & Jozefowiez, Nicolas & Semet, Frédéric, 2021. "A time-expanded network reduction matheuristic for the logistics service network design problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    6. Orenstein, Ido & Raviv, Tal, 2022. "Parcel delivery using the hyperconnected service network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    7. Jahani, Hamed & Abbasi, Babak & Sheu, Jiuh-Biing & Klibi, Walid, 2024. "Supply chain network design with financial considerations: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 312(3), pages 799-839.
    8. Kumar, Pramesh & Khani, Alireza, 2022. "Planning of integrated mobility-on-demand and urban transit networks," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 499-521.
    9. Liu, Chuanju & Zhang, Junlong & Lin, Shaochong & Shen, Zuo-Jun Max, 2023. "Service network design with consistent multiple trips," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    10. Belieres, Simon & Hewitt, Mike & Jozefowiez, Nicolas & Semet, Frédéric, 2022. "Meta partial benders decomposition for the logistics service network design problem," European Journal of Operational Research, Elsevier, vol. 300(2), pages 473-489.
    11. Li, Xiangyong & Wei, Kai & Guo, Zhaoxia & Wang, Wei & Aneja, Y.P., 2021. "An exact approach for the service network design problem with heterogeneous resource constraints," Omega, Elsevier, vol. 102(C).

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