Unbiased decision making in location-routing problems with uncertain customer demands

Abstract In this paper, we focus on a location-routing problem (LRP) in the dairy industry. This consists of locating cold storage warehouse, from which vehicles limited capacity are dispatched to serve given number supermarkets with uncertain service requirements, and determining order served by each vehicle. First, LRP is solved using classical approach based deterministic model where i.e. customer demands, defined through sample means. Second, propose an indifference zone LRP. The procedures specific ranking selection methods aimed at selecting best option set alternative configurations. particular, they attempt guarantee probability correct choice, while minimising computational effort. numerical results presented paper highlight risk biased decision making when mere means used model. addition, show effectiveness approaches products distribution activity.