A continuous‐time service network design and vehicle routing problem

Abstract

This paper considers the integrated planning of goods transportation through a multi‐echelon supply chain consisting of a nationwide network and regional distribution system. The previously studied Service Network Design and Routing Problem considered similar planning decisions, albeit with multiple restrictions regarding the transportation of goods that can eliminate the opportunities for transportation savings. It also does not explicitly model the opportunity to increase vehicle utilization by having vehicles serve multiple purposes within the supply chain. We propose a mathematical model of the problem we consider that is inspired by the operations of an industrial partner. We present an adaptation of the Dynamic Discretization Discovery algorithm to solve this problem and illustrate its computational effectiveness on instances derived from the operations of a retail distribution network in France. Finally, we illustrate the potential savings enabled by solving the proposed model.