An evolutionary algorithm for order splitting with multiple transport alternatives

In this paper, a new methodology is suggested for determining the optimal mix of transport alternatives to minimize total logistics costs when goods are shipped from a supplier to a receiver. The total logistics costs comprise order costs, transportation costs and inventory costs. It is assumed that only a limited number of transport alternatives are capable of shipping the goods from the supplier to the receiver. Moreover, if a certain transport alternative is selected to ship the goods, then its entire capacity is used. These assumptions imply that the number of possible order quantities is finite and that the problem can be formulated as a combinatorial optimization problem. In a first step to explore the use of metaheuristics for optimization problems like these, an Evolutionary Algorithm is developed in this paper. The heuristic is tested on real-life problem instances.

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