A branch and cut algorithm for the location-routing problem with simultaneous pickup and delivery

This paper addresses a location-routing problem with simultaneous pickup and delivery (LRPSPD) which is a general case of the location-routing problem. 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. We propose an effective branch-and-cut algorithm for solving the LRPSPD. The proposed algorithm implements several valid inequalities adapted from the literature for the problem and a local search based on simulated annealing algorithm to obtain upper bounds. Computational results, for a large number of instances derived from the literature, show that some instances with up to 88 customers and 8 potential depots can be solved in a reasonable computation time.