A two-phase method for multi-echelon location-routing problems in supply chains

The multi-echelon location-routing problems (LRPs) arise from transportation applications such as distribution systems of supply chains in city logistics. The literature review shows that most of the previous studies on location-routing in supply chains involve two-echelon LRPs. The main objective of this study is to develop a two-phase method based on improved Clarke and Wright savings algorithm for three-echelon and four-echelon LRPs. Computational experiments show that compared with other methods, the proposed method can obtain the solution for two LRPs in a shorter time. Moreover, computational experiments show this method can solve three and four location-routing problems in reasonable time. The study also provides managerial insights on the proposed models and method. Finally, the limitations on models and method as well as future research directions are given.