A hybrid algorithm for the vehicle routing problem to third party reverse logistics provider

In order to achieve cost efficiency, customer satisfaction and also to concentrate on core business operations, many manufacturing firms are outsourcing their logistics activities to third party logistics (3PLs) provider. Reverse logistics is one type of logistics in which used products or end-of-life products are collected from the customers/retailers and send for reuse, refurbishing, recycling and/or remanufacturing. The third party reverse logistics provider (3PRLP) who is performing the reverse logistics operations is under a pressure of reducing the transportation cost between the customers and the collecting centre. Decreasing transport costs can be achieved through better utilization of resources such as vehicles (i.e. through proper vehicle routing). This study aims to find the optimal routes which will minimize the total distance traveled and corresponding transportation costs for a 3PRLP who transports the used tires from various customers to the centralized depot for the purpose of tire remanufacturing/retreading. A hybrid approach of combining Sweep and Clarke-Wright savings algorithm with Simulated Annealing (SA) algorithm is proposed in this study and also the results of SA are compared with Sweep and Clarke-Wright savings algorithm results.