Global Logistics Network Optimization Including Vehicle Routing Using a Hybrid Meta-heuristic Approach

In the drive to improve business efficiency toward agile and global manufacturing, the importance of logistics as a core of supply chain management has been increasingly apparent. Taking a global logistics network, we have studied various strategic logistic optimization problems and successfully applied a method called hybrid tabu search. Noticing a similarity of hierarchical decision levels between logistics and production planning, we extend the forgoing strategic approach to the tactical level, and include decisions on vehicle routing. Since the original problem is composed of integrated combinatorial optimization problems, its direct solution is almost impossible for largescale problems. So, we have developed a new “two and two level method” by extending the existing hybrid tabu search algorithm. After presenting a general formulation and giving its algorithm, the validity of the proposed approach is examined through numerical experiments and compared with some alternative methods.