A Coordination-Based Algorithm for Dedicated Destination Vehicle Routing in B2B E-Commerce

Abstract

This paper proposes a solution to the open vehicle routing problem with time windows (OVRPTW) considering third-party logistics (3PL). For the typical OVRPTW problem, most researchers consider time windows, capacity, routing limitations, vehicle destination, etc. Most researchers who previously investigated this problem assumed the vehicle would not return to the depot, but did not consider its final destination. However, by considering 3PL in the B2B e-commerce, the vehicle is required back to the nearest 3PL location with available space. This paper formulates the problem as a mixed integer linear programming (MILP) model with the objective of minimizing the total travel distance. A coordinate representation particle swarm optimization (CRPSO) algorithm is developed to obtain the best delivery sequencing and the capacity of each vehicle. Results of the computational study show that the proposed method provides solution within a reasonable amount of time. Finally, the result compared to PSO also indicates that the CRPSO is effective.