Heuristic Procedures for Practical‐Sized Uncapacitated Location‐Capacitated Routing Problems*

Abstract

ABSTRACTFacility location and vehicle routing are two important logistical problems closely interrelated in many real‐world applications where locating facilities and determining the associated multi‐stop vehicle routes are required simultaneously. Previous research has found that using the classical facility location models on these location‐routing problems (LRPs) may lead to suboptimal solutions. We propose an approximate approach for the LRPs, which first generates and improves feasible location/allocation schemes with the associated multi‐stop routing costs approximated using some route length estimators. We then design the minimum‐cost routes based on the location/allocation results. We review two estimators that can provide accurate approximations to the multi‐stop route distances; define the uncapacitated location‐capacitated routing problem; and evaluate several heuristic procedures for approximately solving the problem. Computational results show that when vehicle capacities are not too restrictive, the sequential procedures that incorporate the two robust route length estimators can produce good solutions to practical‐sized problems with a reasonable amount of computational efforts.