A hybrid methodology based on heuristic algorithms for a production distribution system with routing decisions

Abstract

In this paper, we address the integration of a two-level supply chain with multiple items. This two-level production-distribution system features a capacitated production facility supplying several retailers located in the same region. If production does occur, this process incurs a fixed setup cost and unit production costs. Besides, deliveries are made from the plant to the retailers by a limited number of capacitated vehicles, routing costs incurred. This work aims to implement a minimization solution that reduces the total costs in both the production facility and retailers. The methodology adopted based on a hybrid heuristic, greedy and genetic algorithm uses strong formulation to provide a suitable solution of a guaranteed quality that is as good or better than those provided by the MIP optimizer. The results demonstrate that the proposed heuristics are effective and performs impressively in terms of computational efficiency and solution quality.