Mixed multi-echelon location routing problem with differentiated intermediate depots

Abstract

With the increasing of E-commerce parcels in China in recent years, the logistics networks of many express companies are more and more unreasonable. Considering the distribution of parcels is regionally related, we describe a mixed multi-echelon (MME) urban logistics network to handle the regionally distributed parcels. The MME network contains limited urban distribution centers (UDCs), many differentiated intermediate depots (IDs), and a large number of terminals. This research constructs a mixed integer linear programming (MILP) to solve the mixed multi-echelon location routing problem (MME-LRP) where the location and the type of IDs are determined. A hybrid heuristic algorithm based on iterated local search and intensified by path relinking (HH-ILS-PR) is proposed to tackle the problem. The quality of our algorithm and the practicability of the MME network are verified by three sets of instances: two of them are adapted from benchmark instances of 2E-LRP and one is developed from real-world data. In the real-world instance, MME urban logistics network reduces the cost by 11.08% compared with two-echelon urban logistics network. We also present several managerial implications to express companies.