Cold chain distribution: How to deal with node and arc time windows?

Commonly encountered in cold chain logistics, third-party distribution firms are required to deliver temperature-sensitive food products to various retailers with two kinds of time-window constraints: (1) the delivery service must begin within the time windows imposed by the retailers (called node time windows) and (2) each vehicle route is available only in a predefined time interval prescribed by the government (called arc time windows). We study the effects of the retailer time window type (i.e., density of the node time-window constraints) and other cost-related factors on a distribution firm’s legitimacy choice (i.e., the firm chooses to either comply with or violate the governmental time-window policy), food quality, and pollutant emissions in the urban environment. We model the problem as an intractable vehicle routing problem with node and arc time windows and develop a genetic algorithm to tackle it. We conduct a case study to generate the managerial insights on dealing with time windows. We find that the governmental time windows will increase the distribution cost. The governmental time windows has a negative effect on pollutant emissions while showing a positive effect on food safety. Given governmental time windows, a higher demand for node time windows will result in more governmental time-window violations or lower vehicle load factor, which depends on the vehicle fixed cost, fuel price, and government penalty.