Sustainable location routing problem with customers and suppliers matching under stochastic demands

Abstract

Capacitated location routing problem (CLRP) considers the plant location problem of tactical level and the vehicle routing problem of operational level simultaneously. Most existing works on CLRP investigate the deterministic problem settings, while it is usually hard to exactly estimate the customer demands due to some factors. This paper studies a sustainable CLRP with customers and suppliers matching under stochastic demands, where each vehicle starts from a plant and distribute product to customers and load material at a supplier then drive back to the original plant. The problem is to determine the candidate locations to open and the route of each vehicle, in order to minimize the weighted sum of construction cost and the expectation of fuel consumption. For the problem, a two-stage stochastic programming formulation is first proposed, and then a sample average approximation (SAA) method is developed. A case study shows the applicability of the proposed solution method.