Abstract: The Vehicle Routing Problem with time windows is an important
and practical problem for logistics managers. In reality,
when facing fluctuations of demand, logistics managers may
consider using an outside carrier to satisfy partial customer demand
during the peak season. That is, the logistics managers
must make a selection between a truckload (a private truck) and
a less-than-truckload carrier (an outside carrier). Selecting the
right mode to transport a shipment may bring significant cost
savings to the company.
In this paper, we address the problem of routing a fixed number
of trucks from a central warehouse to customers with known
demand and time windows. A heuristic algorithm is developed
for routing the private trucks with time windows and for selecting
of less-than-truckload carriers by minimizing the total cost
function. Computational results are encouraging and some suggestions
for future research are presented.