A hybrid algorithm for large-scale service network design considering a heterogeneous fleet

Abstract

Service network design addresses decisions related to transportation services operation and origin-to-destination commodity flow distribution. In this paper, we consider the usage of a heterogeneous fleet to provide services for a very large transportation network. Apart from decisions on transportation services and commodity flow, the problem also determines the number of vehicles of different types that facilitated on each service link, to better reflect real applications. We propose both arc-based and cycle-path models to formulate the problem. A hybrid algorithm is presented to solve large-scale instances. The method includes pricing and cutting techniques to achieve tight lower bounds, as well as a local search algorithm to obtain high-quality solutions. Computational study indicates the effectiveness and efficiency of the proposed algorithm when compared to the state-of-the-art solver CPLEX. The proposed methodology is applied to a real-world network, which shows the necessity of considering a heterogeneous fleet.