Tools for Real-Life Vehicle Routing Problems with Transshipment

Transportation companies face gradually larger problems where the use of transshipment can have a significant outcome on the costs. ILOG TPO is a software able to solve such problems, but it is hard for it to take good cross-docking decisions. Moreover, the ILOG TPO solving process is based on local search, and it can be helped for global decisions such as transshipment. The current work takes place in this context, and its aim is to help ILOG TPO find better solutions. For this matter, a complete formulation is first proposed to solve the smallest instances, and with a cutting-plane technique, optimal solutions are usually found within reasonnable computing time. Then a two-phase algorithm including a network Mixed-Integer Program (MIP) on a network relaxation of the problem is given for larger instances. This two-phase algorithm is a cooperation between the MIP and ILOG TPO, where the MIP gives ILOG TPO, for each shipment, the hub path through which it should be routed. This heuristic finds similar solutions as ILOG TPO alone, but the processing time is significantly reduced.