Route design for last-in, first-out deliveries with backhauling

The retail route design problem extends the capacitated vehicle routing problem with time windows by introducing several operational constraints, including order loading and delivery restrictions (last-in, first-out), order-dependent vehicle capacity, material handling limits at the warehouse, backhauling, and driving time bounds. In this paper, the problem is modeled on a directed network for an application associated with a major grocery chain. Because the corresponding mixed-integer program proved too difficult to solve with commercial software for real instances, we developed a greedy randomized adaptive search procedure (GRASP) augmented with tabu search to provide solutions. Testing was done using data sets provided Kroger, the largest grocery chain in the US, and benchmarked against a previously developed column generation algorithm. The results showed that cost reductions of $4887 per day or 5.58% per day on average, compared to Kroger's corresponding solutions.