Solving a pickup and delivery routing problem for fourth‐party logistics providers

Abstract

AbstractThis paper studies a pickup and delivery routing problem for fourth‐party logistics providers. The problem aims to schedule routes of vehicles to pick up orders from suppliers and deliver them to factory locations considering multiple time windows at suppliers and factory locations, a non‐conventional cost structure, and certain factory dock constraints. We formulate the problem as a mathematical model and develop an efficient algorithm based on the adaptive large neighborhood search to solve the problem. The algorithm incorporates several heuristics to efficiently explore the search space for optimal solutions. The algorithm is refined through extensive statistical experiments to optimize the performances of the heuristics and to tune the parameters of the algorithm. The mathematical model and algorithm are evaluated on several problem instances based on a real case study in Europe. The numerical results demonstrate that the solution algorithm consistently obtains near‐optimal solutions to real‐sized problem instances.