New Modelling Approaches for Location and Routing Problems towards Sustainable Logistic Systems

Transportations are paramount for a well-functioning society and necessary to secure essential products and maintain our standard of living. These are operations and activities related to distributing packages and goods and providing services by society such as waste collection, postal services, health care, or emergency response. Transports thus affect all of us – companies, the public sector, and individuals – in our daily lives. However, the transportation sector is also one of the most polluting sectors, and in recent years the number distributed goods has increased significantly. Based on the importance of transportation and logistics services and their impact on the economy, environment, and people’s lives, it is in everyone’s interest that these transports are as efficient as possible. The supply chain's underlying infrastructure affects the efficiency and design of distribution routes. As such infrastructure is associated with substantial capital investments, it is crucial to consider the network design and the location of various facilities. The supply chain network design in this context encompasses two major problem classes; the vehicle routing problem aiming to find optimal routes to serve a set of customers by a fleet of vehicles from a central facility, and the facility location problem aiming to find the optimal location for various facilities. Moreover, these problems are interconnected as the facilities affect the demand fulfillment and the vehicle routing. Such problems are often solved with optimization techniques within the field of Operations Research, which is concerned with the mathematical modeling and algorithmic solution of decision-making problems. The objective of this thesis is to contribute to the advancement of the field of supply chain network design, by; I. exploring and identifying opportunities and needs for modeling and solution approaches that cope with the increased complexity of real-life industrial applications in facility location and distribution systems of goods, and II. to propose new modeling approaches and solution methods that cope with such opportunities and needs. The thesis is based on three appended papers. Paper A presents a network design modeling approach for a reverse supply chain of a newly introduced product with difficulties in demand estimations. Paper B is a literature review covering multi-objective location-routing problems; these are strategic models aiming to determine the location of facilities considering aspects of tour planning and multi-stop routes. An annotated review is presented based on the application area of the various models, and an analysis of objectives and solution approaches used. Paper C introduces the Hierarchical Multi-Switch Multi-Echelon VRP, which is a new variant of the vehicle routing problem based on a real-life operational problem originating from the policies of a Nordic distribution company. A mixed-integer formulation of the problem is proposed, and its relations to other previously stated VRP variants are analyzed and discussed