A savings-based heuristic for solving the omnichannel vehicle routing problem with pick-up and delivery

Abstract

In recent times, new models of commerce have incorporated new decisions and constraints which have led to new variants of classical problems in supply chain management. Modern advances in Information and Communication Technologies have increased the number of marketing channels that are available to consumers. This paper focusses on the new "omnichannel" delivery concept for the retailing industry which addresses the replenishment of a set of retail stores and on the direct shipment of the products to customers (last-mile delivery) within an integrated VRP formulation. The VRP in omnichannel distribution systems consists of a group of retail stores that must be served from a distribution center and a set of online consumers that must be served by the same fleet of cargo vehicles from these retail stores. Since the VRP in omnichannel distribution systems is an NP-Hard problem, we propose a savings-based heuristic for solving large-size instances the VRP in omnichannel retailing. Results show that the proposed heuristic is able to find feasible and competitive solutions in a very short computational time.