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Introduction
In this paper the many-to-many location-routing problem (MMLRP) is addressed. The paper is divided into four main parts: problem description,
connection with other problems, mathematical formulation and a solution
framework. In the first part we define the M M L R P and describe the issues
concerned. Then we proceed to point out the connections of the M M L R P
to several distribution problems encountered in practice. To aid our understanding of the problem structure and to illustrate its connections to the
above problems, we present a mathematical programming formulation for
the M M L R P . The final part is an outline of our solution methodology.
Problem
Description
262
feasible sites for establishing a terminal. For these locations, the costs of
establishing and maintaining a terminal is also given. The drop time of
customers (the time required to service their needs) is known. Finally, we
have a fleet of available vehicles with known cost parameters. These belong
to two classes: inter-hub and local delivery/collection vehicles. Both classes
are homogeneous.
We wish to design a system, consisting of terminals and vehicle routes,
so that from each customer the goods it wishes to send are taken away,
and the goods it wishes to receive are supplied to it, by some vehicle to
and from some terminal. It is also necessary to have a fleet of vehicles to
operate between the terminals, and we may suppose t h a t they are cheaper
per unit a m o u n t transported. These vehicles are assumed to link terminals
directly to one another and no tours are allowed. We assume t h a t all
terminals are connected to all the others. On the other hand, access level
vehicles start from some terminal, serve a number of customers and then
return to the same terminal. Serving customers here may mean both a
delivery and a pickup, which may or may not be made at the same time. A
customer has to be visited by at least one vehicle but it is possible t h a t two
vehicles will serve the needs of the same customer (one for pickups and one
for deliveries). The possibility of vehicles returning to their terminals and
then resuming their journey is forbidden. Furthermore, sorting of goods
cannot be performed on vehicles.
Let us now look at what we mean by "designing the system". We have
to find the number and location of terminals, and the number and routing
of vehicles. The result is a two-level network as shown in Figure 1. The two
levels are referred to as hub level and access level respectively. A locational
decision has to be m a d e at the hub level and routing decisions have to be
made at the access level.
Our aim is to design the above system, with the objective of cost minimisation, such t h a t the requirements of the customers and the maximum capacity and maximum distance (time) constraints on the access level vehicles
are met. The costs involved can be divided into two categories: terminal
costs and transportation costs. Only fixed costs are considered in the first
category. Transportation costs may be further divided into linehaul (hubto-hub) and local delivery/collection (hub-to-customers) costs. We assume
t h a t they are both linear functions of route lengths.
Furthermore we note t h a t since the decisions referred to above relate
9 terminals
9 customers
263
264
Connections
with Existing
Problems
and Methods
In this section we shall point out the connections between the problem outlined above and various problems of distribution management. Although
we have adopted the name "the many-to-many location-routing problem",
it will be made clear that it can be viewed as an extension to some other
distribution problems. The inter-connection between the various problems
is illustrated in Figure 2.
3.1
Distribution management
As there are several origins and destinations, and there is a possible demand for goods to be transported from any location to any other, we are
dealing with a many-to-many distribution problem. This necessitates the
case of different commodities, which is satisfied, as each supply-destination
pair determines a different commodity. The structure of local collection,
linehaul, and local delivery vehicles is also present.
If we ignore the underlying routing problem, then our problem reduces
to the hub location problem, see Campbell (1994). While this is in many
Terminal Location
Problem
265
WarehouSeproblemLOCation [
T
Many to Many Location
Routing Problem
Location-Routing
Problem
t
Many to Many
[
Transportation Problem ]
Vehicle Routing
Problem
cases solved as a planar problem, the definition in section 2 clearly puts our
problem to the class of discrete location problems. Thus, the hub location
problem can be solved as a simple extension to the discrete warehouse
location problem, see Mirchandani and Francis (1990).
If we consider the location of all the terminals as fixed then the M M L R P
reduces to the many-to-many transportation problem, also known as the
freight transport problem, see Daganzo (1996). This can be modelled and
solved as an extension to the vehicle routing problem, see Laporte (1992).
3.2
Location theory
266
3.3
Vehicle
routing
Fixing the location of the terminals and disregarding inter-terminal transportation costs, the M M L R P can be transformed into a multi-depot vehicle
routing problem. The supply and demand of customer i are the sums Y~j qji
and Y~j qij respectively. As all customers can simultaneously be delivery
and pickup points, and as sorting is not performed on the vehicles, we are
dealing with a simultaneous pickup and delivery problem, see Min (1989).
This can be solved using suitable extensions to multi-depot routing methods.
By fixing the supply of all customers to zero and setting up a fictitious
super-origin the problem further reduces to the basic multi-depot vehicle
routing problem, see Salhi and Sari (1997).
3.4
Location-routing
The problem we consider unifies the terminal location problem (in its g l o b a l
structure) with the pickup-and-delivery problem (in its local structure) in
the framework of location-routing. Although the problem could be solved
without using this field of research - by solving the two sub-problems separately - it is clear from the literature that the use of location-routing
methods improves the solution quality, see Balakrishnan, Ward and Wong
(1987), Salhi and Rand (1989), and Salhi and Fraser (1996).
4
4.1
Mathematical
Formulation
Introduction
This being a new problem, no ILP formulations exist for it in the literature
as yet. Before showing how to solve this problem, we have considered it
desirable to develop an ILP formulation to aid our understanding of the
problem structure. Although such formulations may also be used as part of
the solution procedure, for the ILP may be solved by some exact method,
we shall not a t t e m p t to do this. The reason for having to rely on a different
approach is that ILPs of large size may not be solved efficiently, and our
ILP formulation contains a large number of variables even for a relatively
small number of customers.
267
Notation
7t
ff
/~
(~
{~
ifhubsiandjareconnected
otherwise
Yi =
zij =
{10 ifarcijispartofroutek
~Cijk ~
otherwise
268
vi=
4.3
Formulation
Min Z fiyi + Z
iEH
Y~ v~dijxok + Y~ Y~ t3dijzo
kEIC i E H U J jEHU,.q"
iEH j E H
subject to
(Z
(k 9 If.)
(4.1)
i,j 9 7 / U J
k9
(i, j 9 7/)
(i, j 9 7/)
(i, j 9 7/)
(j 9 7/)
(4.2)
(j 9 7/)
(4.7)
(j 9 j )
(4.8)
i E "Hu,.'T j E 7../u,.7"
tijk < Q
zo <_yi
zij < yj
zij > Yi "at-Yj - - 1
Z Z xOk --> 1
(4.3)
(4.4)
(4.5)
(4.6)
kEICiE~tUff
kEICiET-luJ
kEKiE't.luJ
Z
Z
Xijk =~)J-n
kEICiET-IU,.7"
;gijk~
- ITI
gET
xijk.= Z
j E'HU,3"
xjik
jE'~uJ
(4.1o)
(k e/C)
(4.11)
(j e ~)
(i,j e 7/)
(4.12)
(4.13)
vy < l - y j
gE?.lhE'H
gET.lhEH
i, j E 7 / U f l
kEK
(4.14)
Z Z
kEK iE~luff
"-- Z
iE~l
iE~
tjik + Z w j i - ( Z q j i ) ( 1 - v j )
kE~iE~uff
iE~
269
(j E 7/)
(4.15)
(j e 3.)
(4.16)
(i e 7/)
(i,j E 7/)
(4.17)
(4.18)
iE~
Z
~
tijk-l-Zwij=
kEKiE~Uff
=ZZ
kE~iE~uff
iE74
Yi E {0, 1}
zij E {0, 1}
Xijk E
{0, 1}
v, E {0, 1}
Wij )_ 0
t~jk > 0
4.4
i, j E 7 / U 3 .
k E K~
(i E 7/)
(i,j r 7/)
i,j E 7/U 3"
k E/C
(4.19)
(4.20)
(4.21)
(4.22)
Discussion
270
E x t e n s i o n s . The formulation presented in subsection (4.3) can be modified to cater for additional specifications on the problem. Capacity constraints may be set for terminals by specifying an upper bound for ~je7-t (wij
+wji) for each feasible location i. Depending on the problem specifications,
the maximum capacity constraint for inter-hub vehicles is expressed as an
upper bound either on (wij + wji) or on wij for all pairs of locations i, j. If
the access level vehicle fleet is heterogeneous, then D and Q in inequalities
(4.1.) and (4.2.) should be replaced by Dk and Qk respectively: these latter expressions specify the maximum distance and capacity levels for each
vehicle k. The different running costs of the vehicles can be accounted for
by replacing c~ with c~k in the objective function. We note that some other
assumptions, such as time windows or hub level routing, may be much more
difficult to incorporate.
R e d u c t i o n s . In order to stress the relationship of the M M L R P to other
distribution problems, we shall show below how the ILP formulation presented in subsection (4.3) can be reduced into ILPs for a number of known
problems in distribution management. These reduced versions will of course
not be the simplest ones available for these problems. We note that for
all problems where customers do not send goods, expressions of the form
~ i e u qij are replaced by q, the demand of customer j.
The basic location-routing problem can be formulated by adding the set
of equations zij = 0 (i, j E 7t) and deleting constraints (4.3.), (4.4), (4.5.)
and (4.13.). Two alternative formulations for this problem can be found in
Nagy (1996, p.56), and Nagy and Salhi (1996b).
We may find a formulation for the problem of locating terminals by
adding the following sets of equations: vi = 0 (i E 7/) and xijk = xjik (i,j E
7 / U if, k E /~). The warehouse location problem can be formulated from
271
the above by adding constraints zij -- 0 (i, j E 7/) and deleting inequalities
(4.3.), (4.4.), (4.5) and (4.13.).
The m a n y 4 o - m a n y transportation problem can be formulated by adding
the set of equations Yi = 1 for all terminals i and the set yj : 0 for other
customers. This can be reduced to a formulation for the vehicle routing
problem with pickups and deliveries by adding equations zij = 0 (i, j E 7-0
and deleting constraits (4.3.), (4.4.), (4.5) and (4.12.). An alternative formulation for this problem can be found in Nagy (1996, p.57). By also
setting vi = 0 for all i we arrive at a formulation for the basic vehicle
routing problem.
5
5.1
Solution Framework
Introduction
T e r m i n a l location
Noting the close relationship between the terminal and the basic location
problems, as asserted by Kara and Tansel (1996), we use a suitable modified
272
A c c e s s level routing
Total cost
Radial cost
Number of terminals
Number of vehicles
Number of iterations
Total computing time (mins)
CPU time per iteration (secs)
Sequential method
3439
3818
10
38
124
5.27
2.6
273
Proposed method
3226
4391
8
34
39
123
189
5.5
I l l u s t r a t i v e results
Conclusion
and Suggestions
In this work, we have investigated the many-to-many location-routing problem. An integer linear programming formulation for this problem was given.
An example problem instance was solved for illustration.
We believe that the many-to-many location-routing problem and its
sub-problems are both interesting and challenging areas of research, due to
274
their practical and theoretical importance, and we hope that further results
will support and reinforce our view.
Acknowledgements
We would like to thank Dr Kathrin Klamroth from the University of Kaiserslautern for her helpful suggestions. We are also grateful to the referees for
their comments and suggestions. Dr Nagy is grateful to the School of
Mathematics and Statistics of the University of Birmingham and to the
C o m m i t t e e of Vice Chancellors and Principals for financial support.
References
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275
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