A simulated annealing for designing the distribution network of a “Collect-on-delivery” company in a metropolis context

Parcel delivery service by Collect-on-delivery (“COD”, a.k.a Cash-on-delivery) companies is a new distribution mode in China. It includes two types of trips: first level trips serving from one of the central distribution centers to a set of regional distribution centers, which are to be located, and second trips supplying end customers from these regional distribution centers. The design of the distribution network of a “COD” company in urban areas is a relatively new research direction which can be modeled as a two-echelon location routing problem (2E-LRP). A simulated annealing (SA) algorithm efficiently combining the sub-problems is presented. Experimental results are reported for 30 2E-LRP instances from Prodhon's benchmarks. In a comparison with three recently published metaheuristics, only one (ALNS) does better. It indicates that the proposed SA is an effective metaheuristic to solve 2E-LRP problem, i.e., design distribution network of a “COD” company in a metropolis context.