A sustainable facility location problem with vehicle allocation: an urban logistics case study

Redesigning urban distribution networks contributes to reducing the negative impacts on the environment and people’s well-being caused by urban freight delivery operations. One solution is to locate a set of hubs in strategic sites in the city to make the distribution more efficient and environmentally friendly. The objective of this paper is to study the hub location problem and vehicle allocation, and to design a distribution network for freight deliveries in urban areas. Data from a case study in the city of Bogota, Colombia is used as an example of the proposed solution. Firstly, a mathematical programming model is proposed to minimize transportation costs, hub location costs, and CO₂ emissions. Given the multi-objective nature of the problem, the solution is obtained following a lexicographic approach. Moreover, multiple scenarios are considered to analyse which might be the most suitable according to the decision-makers’ objectives or requirements. The results obtained through the proposed approach provide a tool for decision-makers to be strategic when choosing the solutions to implement for the case study. These insights and the modelling and solution approach can be generalized for implementation in other cities with similar concerns regarding urban freight distribution.