Multi-Objective Location Routing Problem with Time Windows for Cost Minimization and Customer Service Level Maximization

Distribution is a key factor for a company's profit as it directly impacts the overall supply chain cost. Location Routing Problem (LRP) is a well-known concept to reduce facility location and vehicle costs. Currently, the time aspect has been considered a lot in LRP to bring better service levels for a company as it shows how responsive a supply chain is. In completing service level objective, time windows have been used to measure whether the delivery is successful in the planned time or not. Moreover, LRP research has been advised to take on a multiple-objective approach, which are not available much. Therefore developing and testing a model with multiple objectives such as cost and service level is at most important. The model for this specific problem is designed and tested using exact goal programming method for small-case instance, i.e. 4 distribution centers and 8 retailers. This research has brought modeling of multi-objective location routing problem with time windows to minimize the total cost and maximize the service level (MOLRPTW-SL). It gives a set of solutions for deciding the right distribution center, vehicles, and routes depending on the scenario considered. The trade-off between cost and service level is also provided.