A Hybrid Meta-heuristic Method for Optimizing Logistic Networks Subject to Operational Conditions in Practice

Abstract Under agile and global manufacturing environment, importance of logistics as a core of supply chain management has been acknowledged increasingly. In this study, we provide a practical hybrid method for a hierarchical logistic network optimization belonging to a tactical level. Since the problem is made of different kinds of NP-hard combinatorial optimization problems, its rigid solution is almost impossible for practical scale problems. Hence, to cope with the problem in practice, we have developed a three-level method in terms of the modified insertion method for VRP with time windows. It is deployed on a basis of Ton-Kilo (load (ton) multiply distance (km)) based evaluation instead of the conventional Kilo (distance only) based one. It also includes a new mechanism that enables us to engage in multi-objective analysis between economics and service of delivery. Validity of thus developed method is examined through numerical experiments.