Nested simulated annealing approach to periodic routing problem of a retail distribution system

Abstract

This paper introduces a real-life variant of a periodic traveling salesman problem (V_PTSP) for a retail distribution system. A warehouse is allocated to serve specified retail districts where a large number of retailers are located and the deliveries are planned according to the visiting frequency of each retailer. The objective is to determine daily vehicle routes over a given planning period adhering to the visiting frequency restrictions while minimizing the total distance traveled. Initially, the V_PTSP is formulated as an integer programming model. Since this model can only solve small size problems, a nested simulated annealing procedure is developed for solving large size V_PTSPs. A series of computational tests are performed for evaluating the performance of the heuristic procedure. The results show that the proposed approach gives good solutions in reasonably short computation times.