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Distribution systems design with two-level routing considerations

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  • Jenn-Rong Lin
  • Hsien-Chung Lei

Abstract

In this study, we formulate and analyze a strategic design model for three-echelon distribution systems with two-level routing considerations. The key design decisions considered are: the number and locations of distribution centers (DC’s), which big clients (clients with larger demand) should be included in the first level routing (the routing between plants and DC’s), the first-level routing between plants, DC’s and big clients, and the second-level routing between DC’s and other clients not included in the first-level routing. A hybrid genetic algorithm embedded with a routing heuristic is developed to efficiently find near-optimal solutions. The quality of the solution to a series of small test problems is evaluated—by comparison with the optimal solution solved using LINGO 9.0. In test problems for which exact solutions are available, the heuristic solution is within 1% of optimal. At last, the model is applied to design a national finished goods distribution system for a Taiwan label-stock manufacturer. Through the case study, we find that the inclusion of big clients in the first-level routing in the analysis leads to a better network design in terms of total logistic costs. Copyright Springer Science+Business Media, LLC 2009

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  • Jenn-Rong Lin & Hsien-Chung Lei, 2009. "Distribution systems design with two-level routing considerations," Annals of Operations Research, Springer, vol. 172(1), pages 329-347, November.
    • Handle: RePEc:spr:annopr:v:172:y:2009:i:1:p:329-347:10.1007/s10479-009-0628-y
    DOI: 10.1007/s10479-009-0628-y
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    Cited by:

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    2. Paolo Gianessi & Laurent Alfandari & Lucas Létocart & Roberto Wolfler Calvo, 2016. "The Multicommodity-Ring Location Routing Problem," Transportation Science, INFORMS, vol. 50(2), pages 541-558, May.
    3. Zhu, Stuart X. & Ursavas, Evrim, 2018. "Design and analysis of a satellite network with direct delivery in the pharmaceutical industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 116(C), pages 190-207.
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    5. Janjevic, Milena & Winkenbach, Matthias & Merchán, Daniel, 2019. "Integrating collection-and-delivery points in the strategic design of urban last-mile e-commerce distribution networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 37-67.
    6. Prodhon, Caroline & Prins, Christian, 2014. "A survey of recent research on location-routing problems," European Journal of Operational Research, Elsevier, vol. 238(1), pages 1-17.
    7. Ali Heidari & Din Mohammad Imani & Mohammad Khalilzadeh & Mahdieh Sarbazvatan, 2023. "Green two-echelon closed and open location-routing problem: application of NSGA-II and MOGWO metaheuristic approaches," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9163-9199, September.
    8. Younes Rahmani & Wahiba Ramdane Cherif-Khettaf & Ammar Oulamara, 2016. "The two-echelon multi-products location-routing problem with pickup and delivery: formulation and heuristic approaches," International Journal of Production Research, Taylor & Francis Journals, vol. 54(4), pages 999-1019, February.

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