A Genetic Algorithm-Based Heuristic for Network Design of Service Centers with Pick-Up and Delivery visits of Mandated Vehicles in Express Delivery Service Industry

In Korean express delivery service market, many domestic companies have been competing fiercely to extend
their own market share. The line-haul vehicles operated by the express delivery service companies in Korea in general
can be classified into three types depending on the ways their expenses occur; company-owned vehicle, mandated
vehicle which is owned by outsider who entrust the company with its operation, and rented vehicle (outsourcing).
Actually, most of the line-haul vehicles in express delivery services belong to the mandated vehicle class. Hence, this
study suggests an approach to the design of a service network with pick-up and delivery visits for mandated line-haul
vehicles with the objective of maximizing the incremental profits of the drivers of the vehicles under the assumption that
express delivery service companies operate mandated vehicles only. A genetic algorithm-based heuristic is developed
and tested through an example problem.




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