Commercial Territory Design for a Distribution Firm with New Constructive and Destructive Heuristics
A commercial territory design problem with compactness maximization criterion subject to territory balancing and connectivity is addressed. Four new heuristics based on Greedy Randomized Adaptive Search Procedures within a location-allocation scheme for this NP-hard combinatorial optimization problem are proposed. The first three (named GRLH1, GRLH2, and GRDL) build the territories simultaneously. Their construction phase consists of two parts: a location phase where p territory seeds are identified, and an allocation phase where the remaining basic units are iteratively assigned to a territory. In contrast, the other heuristic (named SLA) builds the territories one at a time. Empirical results reveals that GRLH1 and GRLH2 find near-optimal or optimal solutions to relatively small instances, where exact solutions could be found. The proposed procedures are relatively fast. We carried out a comparison between the proposed heuristic procedures and the existing method in larger instances. It was observed the proposed heuristic GRLH1 produced competitive results with respect to the existing approach.
territory design combinatorial optimization location-allocation heuristics grasp