Integrated Facility Location and Vehicle Routing Models: Recent Work and Future Prospects

SYNOPTIC ABSTRACT

Facility location and vehicle routing are two widely used and studied management science resource planning models. According to the 1986 Statistical Abstract of the United States, freight transportation outlays for local trucking totaled 80.9 billion dollars in 1983. Thus, location/routing decisions have considerable economic importance in domains such as distribution systems planning. Since location and routing decisions are closely related, integrated models that consider the two aspects simultaneously offer the promise of more effective and economical decisions. However, such integrated models are complex and their design poses challenges in combining the short-term operational considerations of vehicle routing with the medium/long-term strategic issues of facility location. This paper discusses recent research related to various modeling approaches for location/routing problems, including comprehensive mathematical programming formulations, analytical approximations, and modified facility location models. We assess the advantages and disadvantages of these approaches and give possible directions for future research.

Key Words and Phrases:

• logistics
• facility location
• vehicle routing
• integrated models
• hierarchical planning