The last-mile delivery vehicle routing problem with handling cost in the front warehouse mode

Abstract

This paper aims to investigate the vehicle routing problem faced by a logistics service provider that performs the last-mile delivery of large household appliances under the front warehouse mode for multiple enterprises. We formulate the problem as a new variant of the pickup and delivery problem and present a mixed integer programming model for it. To solve this problem heuristically, the neighborhood structures with newly proposed move operators are explored within a variable neighborhood search (VNS) and a randomized tabu thresholding (RTT). Experiments on small instances clearly indicate the effectiveness of the two heuristic methods. The comparative results on large-scale instances show that RTT performs relatively better than VNS. In addition, through comparison with computational results of algorithms from the literature, RTT proves good ability to solve a related problem. Furthermore, we introduce a sample case to explore the benefit of FWM for last-mile delivery and to discuss the impact of inventory in front warehouses, handling cost, and split delivery on the solution.