A Heterogeneous Vehicle Routing Problem with Soft Time Windows for 3PL Company's Deliveries: A Case Study

Abstract

Route optimization is tactically important for companies that must fulfill the demands of different customers with fleet of vehicles, considering multiple factors like: The cost of the resources (vehicles) involved and the operating costs of the entire process. As a case study, a third-party logistics service provider, ABC Company, is introduced to implement optimization on. Furthermore, ABC Company's problem is defined as route optimization and load consolidation problems that will be solved as heterogeneous vehicle routing problem with soft time windows (HVRPSTW). In this paper's case, Vehicles travel from a central depot with a restricted capacity, serving clients just once within a defined time interval and providing a needed demand before returning to the central depot. ABC Company's problem is mathematically formulated and solved using branch and bound method. The formulation is solved on LINGO. The final output is the route, time, cost, and load of each vehicle.