A Hybrid Meta-heuristic Approach for Customer Service Level in the Vehicle Routing Problem

The distribution represents a critical factor for e-commerce. Global competitiveness and increasing changing rate of the marketplace conditions force enterprises performing e-business activities to pay more attention to rationalization of shipping processes and reduction of logistic costs. With modern internet applications it is possible to offer distribution services with different quality levels based on different customer preferences; but one of the lacks of these tools is that they don’t have a direct connection between transportation costs and customer choices. In this paper we study the distribution as a capacitated vehicle routing problem with time window constraints. Time windows are used as an indicator of customer service level and they can be inserted in the model as hard constraints or evaluated in the objective function as penalties. We propose a hybrid meta-heuristic algorithm based on the hybridisation of Genetic Algorithm and local search heuristic by incorporating an insertion heuristic able to find an effective trade–off between total transportation cost and customer service level.