Vehicle routing problem with time windows considering overtime and outsourcing vehicles

  • Authors:
  • Ilkyeong Moon;Jeong-Hun Lee;June Seong

  • Affiliations:
  • Department of Industrial Engineering, Pusan National University, Busan 609-735, South Korea;Postal & Logistics Technology Research Department, Electronics and Telecommunications Research Institute, Daejeon 305-700, South Korea;Overseas Business Planning Team, Sejong Industrial Co., Ltd., Ulsan 683-360, South Korea

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2012

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Abstract

The vehicle routing problem with time windows (VRPTW) is an important problem in third-party logistics and supply chain management. We extend the VRPTW to the VRPTW with overtime and outsourcing vehicles (VRPTWOV), which allows overtime for drivers and the possibility of using outsourced vehicles. This problem can be applied to third-party logistics companies for managing central distributor-local distributors, local distributor-retailers (or customers), and manufacturers. We developed a mixed integer programming model, a genetic algorithm (GA), and a hybrid algorithm based on simulated annealing. The computational results demonstrate the efficiency of the developed algorithms. We also develop a decision support system for the VRPTWOV that is equipped with a vehicle route rescheduling function for realistic situations based on the GA.