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G-2025-49

Two-echelon production routing problem with simultaneous pickup and delivery

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This paper introduces a novel variant of the Production Routing Problem (PRP) in a Two-Echelon supply chain involving multiple production plants, distribution centers (DCs), and retailers. Each plant produces a unique item, different from what the other plants produce. We consider reverse logistics through recyclable packaging collection from retailers to the plants through the DCs. The objective is to minimize the total cost, which includes production, inventory, and transportation costs, over a multi-period and finite horizon. The problem incorporates two-echelon distribution systems, one between the plants and DCs, and one between the DCs and the retailers, in which we consider a heterogeneous fleet of vehicles and model a Vehicle Routing Problem with Simultaneous Pickup and Delivery (VRPSPD). Additionally, inventory management is considered at all facilities for pickups and deliveries. In this study, we develop a mixed integer linear programming (MILP) model, which is then solved using a commercial solver for small problem instances. We also analyze the complexity of the problem and the impact of different parameters on the structure of the solution.

, 14 pages

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