Multi-product pickup and delivery supply chain design with location-routing and direct shipment

This paper presents a decision making model that considers distribution centers locating, pickup and delivery vehicle routing, and direct shipment simultaneously. The goal is to optimize the distribution centers' location, the delivery, pickup, and direct shipment routes so that the total costs are minimized. Two types of delivery modes are considered. In the first type, each vehicle loads the same type of products and in the second type, each vehicle is allowed to load multiple types of products. An integrated mixed integer linear programming model was formulated for each delivery type. Computational experiments were conducted to validate the models. Three solution methods: deterministic mode, opportunistic mode, and benders decomposition algorithm in CPLEX have been analyzed.