Research And Logistics Distribution Network Design Based On Location Routing Problem

In a supply chain, the location-routing related cost in a physical distribution system possesses the major working capital. Accordingly, it is an important issue about reducing the location-routing related cost. The Location-routing Problem is to find the optimal number and locations of the distribution centers as well as the distribution routes, so as to minimize the total system cost.The purpose of this research is to develop a methodology to design the location-routing problem of supply chain system. The system not only considers the relationships between physical distribution center and retail store, but also that between physical distribution center and supplier. In many logistic environments, decision markers have to deal with these location selection and vehicle dispatching problems in different levels among plants, distribution centers and retailers. The purpose of this method is to combine the location-allocation for plants and distribution centers and vehicle routing for suppliers and retailers into an integrated mathematical programming model in order to minimize the total setup and operational costs.The Location-routing Problems are very difficult to solve since they combine two NP-hard problems: the Location-allocation Problem (LAP) and the Vehicle-routing Problem (VRP). Due to the problem complexity, it is difficult to solve this problem through exact algorithm. A heuristic based on Genetic Algorithm is conducted to solve the problem in this research. This research studied the performance of the proposed method. It was found that Genetic Algorithm can obtain better result in application.