Experimental study on a collaborative model for inventory routing in city logistics

Abstract

This project considers two scenarios to observe the impact of a city hub in a B2B city logistics setting in terms of inventory and routing aspects. The first scenario is the basic scenario in which there is no city hub. In this scenario, each retailer defines its replenishment policy, and each supplier determines its optimal delivery plan independently. In the second scenario, retailers decide on their order size and suppliers send their products via a city hub. The city hub plans the optimal routes to deliver to the retailers with cargo bikes and vans, where cargo bikes can also perform multiple trips if necessary. For the inventory part, five different replenishment methods are used to define the order size from each retailer in each period. A metaheuristic algorithm based on Large Neighbourhood Search (LNS) is developed to solve the route optimization problem. An experimental study with several test variables, including the number of suppliers, number of retailers, holding cost, and replenishment method, is conducted. Performance measures, such as total cost, distance travelled, loading degree, and the number of trips, are used in the evaluation criteria. Based on the results of the experimental study, we investigate in which situation the city hub’s implementation will improve the city logistics performance and how each variable affects the performance measures.