Application of Hierarchical Facility Location-Routing Problem with Optimization of an Underground Logistic System: A Case Study in China

Facility location problem (FLP) and vehicle routing problem (VRP) are two of the most challenging issues in logistics. This paper presents an exploration of the multinode facility location-routing problem with realistic conditions. The disposal centers, transfer stations, connected collection sites, and unconnected collection sites are built into a new hierarchical model which is solved by Generate Algorithm (GA). Model costs include node construction cost, pipeline construction cost, transport cost, and transfer cost. This paper considers that the transportation is a bidirectional flow not a single flow; each pairs node in the area needs transportation; the dynamic routing selection method is used to determine the routes of unconnected collection sites. FLP and VRP can be both solved in this model. To illustrate the applicability of the model, a case study is presented and the results are discussed. The model in this paper can reduce the cost of the traditional underground logistics system by 6%~8% in experiments.