Location routing problem with simultaneous pickup and delivery in distribution network design

In today?s competitive environment, it is obvious that companies should make strategic and operational decisions in order to optimize and manage the processes in their supply chain more efficiently. One of the most important strategic decisions concerns the design of distribution networks since it offers great potential to reduce costs and to improve service quality. The main elements in designing a distribution network are location and routing decisions. As these elements are interdependent in many distribution networks, the overall system cost can increase if routing decisions are ignored when locating facilities. The location-routing problem (LRP) overcomes this drawback by simultaneously dealing with location and routing decisions. In this thesis, LRP with simultaneous pickup and delivery (LRPSPD) which is a general case of the LRP by considering simultaneously pickup and delivery demands of each customer has been considered. The LRPSPD is defined as finding locations of the depots and designing vehicle routes in such a way that pickup and delivery demands of each customer must be performed with same vehicle and the overall cost is minimized. Because of the political, economic and environmental reasons, the LRPSPD has numerous application areas in health care systems, automotive industries, grocery-store chains, etc. To the best of our knowledge, this thesis is the first to address the LRPSPD. To solve the problem, two mathematical models, a lower bounding procedure and two exact algorithms have been proposed. The computational results performed on test problems derived from the literature indicate that while the proposed algorithms provide optimal solutions in reasonable computation times for small and medium-size instances, they reach near optimal solutions for large-size instances.