Integrating order picking and vehicle routing decisions

Abstract

B2C e-commerce is still growing annually and e-commerce customers have high expectations concerning their online purchase and its delivery. Consequently, the logistics activities of companies are under pressure, especially the order picking and vehicle routing operations. Companies have to thoroughly redesign their processes and activities. Integrating order picking and vehicle routing operations lead to larger improvements than optimising each individual subproblem separately. In this dissertation, the integrated order picking-vehicle routing problem (I-OP-VRP) is introduced and described in detail. A heuristic algorithm using a record-to-record travel framework is proposed. Experiments are conducted to quantify the value of integration. By integrating both subproblems, the service level offered to the customers can be improved and cost savings can be obtained.