The two-echelon production routing problem with cross-docking satellites

This paper introduces a mixed integer programming model for the two-echelon production routing problem with cross-docking satellites. This problem is important in e-commerce, home delivery services, and city logistics. To solve this problem, we propose a branch-and-cut algorithm with proved valid inequalities and a matheuristic that can provide feasible initial solutions. Extensive computational results are reported, which are obtained on instances derived from benchmarks for the production routing problems and two echelon vehicle routing problems. Management insights on dynamic balance among handling costs, inventory costs, and routing costs are also drawn from the sensitivity analysis.

Automated summary

This paper presents a mixed integer programming model for the two-echelon production routing problem with cross-docking satellites, demonstrating a branch-and-cut algorithm and a matheuristic approach for solving it. Extensive computational results are provided, derived from benchmarks for production routing problems and two echelon vehicle routing problems. Insights on dynamic balance among handling costs, inventory costs, and routing costs are drawn from sensitivity analysis.