Combining Heuristics with Simulation and Fuzzy Logic to Solve a Flexible-Size Location Routing Problem under Uncertainty

Abstract

The location routing problem integrates both a facility location and a vehicle routing problem. Each of these problems are NP-hard in nature, which justifies the use of heuristic-based algorithms when dealing with large-scale instances that need to be solved in reasonable computing times. This paper discusses a realistic variant of the problem that considers facilities of different sizes and two types of uncertainty conditions. In particular, we assume that some customers’ demands are stochastic, while others follow a fuzzy pattern. An iterated local search metaheuristic is integrated with simulation and fuzzy logic to solve the aforementioned problem, and a series of computational experiments are run to illustrate the potential of the proposed algorithm.