Heuristic and lower bound for a stochastic location-routing problem

In this article a stochastic location-routing problem is defined and cast as a two-stage model. In a first stage the set of plants and a family of routes are determined; in a second stage a recourse action is applied to adapt these routes to the actual set of customers to visit, once they are known. A two-phase heuristic is developed. An initial feasible solution is built by solving a sequence of subproblems, and an improvement phase is then applied. A lower bound based on bounding separately different parts of the cost of any feasible solution is also developed. Computational results are reported. (c) 2006 Elsevier B.V. All rights reserved.