A green transportation location-inventory-routing problem by dynamic regional pricing

Abstract

Non-uniform distribution of customers in a region and variation of their maximum willingness to pay at distinct areas make regional pricing a practical method to maximize the profit of the distribution system. By subtracting the classic objective function, which minimizes operational costs from revenue function, profit maximization is aimed. A distribution network is designed by determining the number of trucks to each established distribution center, allocating customers in routes, and inventory levels of customers. Also, environmental impacts, including fuel consumption and CO2 emission, aimed to be minimized. So, a new quadratic mixed-integer programming model is presented for the Green Transportation Location-Inventory-Routing Problem integrated with dynamic regional pricing problem (GTLIRP+DRP). The model is applied to the real case study, to show its competent application. To tackle this problem, a Hybrid Bees Algorithm (HBA) is developed and verified by the genetic algorithm. Finally, managers suggested using HBA that achieves better solutions in the less computational time.