Upper and lower bounds for the vehicle-routing problem with private fleet and common carrier

The vehicle-routing problem with private fleet and common carrier (VRPPC) extends the capacitated VRP by considering the option of outsourcing customers to subcontractors at a customer-dependent cost instead of serving them with the private fleet. The VRPPC has important applications in small package shipping and manufacturing, but despite its relevance, no exact solution approach has been introduced so far. We propose a branch-price-and-cut algorithm that is able to solve small to medium-sized instances and provides tight lower bounds for larger instances from the literature. In addition, we develop a large neighborhood search that shows a decent solution quality and competitive run-times compared to the state-of-the-art on instances with homogeneous as well as heterogeneous vehicle fleet. In addition, several new best known solutions are found.