Project R-16024

Improving livability in urban areas by using a city hub: solutions to the two-echelon inventory routing problem (Research)

The world population living in urban areas is growing continuously, causing challenges in the logistics operations. E.g., large trucks deliver to retailers in the urban area, leading to many externalities, such as dangerous traffic situations, noise pollution and greenhouse gas emissions. Livability can be improved by a different configuration of the supply chain. Instead of direct shipments by multiple suppliers to a retailer, a city hub can be introduced to obtain a two-echelon setting. Suppliers deliver to the hub in the first echelon. In the hub, goods of multiple suppliers are consolidated and can be stored temporarily. Next, in the second echelon, the hub makes a consolidated delivery to the retailers. This way, suppliers can deliver with large trucks to the hub, while smaller, more environmentally friendly vehicles can be used in the second echelon, to deliver in the urban area. To obtain efficient operations, both echelons should be synchronized. Furthermore, there is a trade-off between frequent deliveries and larger inventories. The main objective of this project is to develop models and algorithms to decide on both the delivery schedule and the delivery quantity in realistic urban settings. The project will provide insights and algorithms to the operations research community in general, and provide insights on optimizing logistics operations in the urban area, valuable for policymakers and practitioners to develop regulations and improve operational performance.

01 October 2025 - 30 September 2028