Incorporating supplier selection and order allocation into the vehicle routing and multi-cross-dock scheduling problem

In the vehicle routing problem with cross-docking (VRPCD), it is assumed that the selected suppliers and the quantity of the products purchased from each supplier are known. This paper presents an MILP model which incorporates supplier selection and order allocation into the VRPCD in a multi-cross-dock system minimising the total costs, including purchasing, transportation, cross-docking, inventory and early/tardy delivery penalty costs. The sensitivity of the model on the key parameters of the objective function is analysed and the supply decisions are evaluated when the coefficients of the distribution cost are changed. A two-stage solution algorithm (TSSA) is proposed and the results of the TSSA for small-sized instances are compared with the exact solutions. Finally, a large-sized real case of an urban freight transport is solved using the TSSA.