A simulated annealing heuristic for the open location-routing problem

This paper introduces the open location-routing problem (OLRP) that is a variant of the capacitated location-routing problem (CLRP). OLRP is motivated from the rise in contracting with third-party logistic (TPL) companies and is different from CLRP in that vehicles do not return to the distribution center after servicing all customers. The goal of OLRP is to minimize the total cost, consisting of facility operation costs, vehicle fixed costs, and traveling costs. We propose a simulated annealing (SA)-based heuristic for solving OLRP, which is tested on OLRP instances that have been adopted from three sets of well-known CLRP benchmark instances with up to 318 customers and 4 potential depots. The computational results indicate that the proposed heuristic efficiently solves OLRP.