A Novel Multi-Objective Two-Echelon Green Location-Routing Problem from a City Government Perspective Rafael Aquino 1 , Benjam´ ınBar´an 1 , Fabio L´ opez-Pires 1,2 , Fernando Sandoya 3 , and Jorge Luis Chicaiza 4 raquinos@outlook.com, bbaran@pol.una.py, fabio.lopez@pti.org.py, fsandoya@espol.edu.ec, jorge.chicaiza@epn.edu.ec 1 Polytechnic School, National University of Asunci´ on, San Lorenzo, Paraguay 2 Itaipu Technological Park, Hernandarias, Paraguay 3 Department of Mathematics, ESPOL Polytechnic University, Guayaquil, Ecuador 4 Department of IT in Production and Logistics, Tech. Univ. Dortmund, Germany Abstract. This work presents a novel two-echelon, multi-product, Green Location-Routing Problem formulation, from a city government perspec- tive, for the optimization of five objective functions, two of them related to pollutant emissions minimization. Additionally, it is demonstrated that the use of city distribution centers (CDCs), compared to direct ship- ping, is a better strategy for a congested city as Asunci´ on in Paraguay. Initial experimental results using an exhaustive search alternative prove a 5-21% reduction of carbon monoxide (CO) emissions, a 8-23% reduction of carbon dioxide (CO2) emissions and a 8-17% reduction in shipping costs, given an initial investment in CDCs. 1 Introduction The Location-Routing Problem (LRP) is an NP-Hard combinatorial optimiza- tion problem [12] considered as an extension of the well known Vehicle Routing Problem (VRP) [7]. The main difference between them is that the LRP optimizes not only routing but also depot placement [12]. The single-echelon LRP considers a set of potential depots and a set of cus- tomers. In a two-echelon (2E) LRP, the first echelon is composed of manufac- turers and depots (also called satellites or city distribution centers, CDCs [2]) 5 , while the second echelon is composed of depots and customers. At first, goods are transported from manufacturers to depots, and distributed from there to the final customers. Figure 1 shows an example of a two-echelon LRP where α and β, located at the top, represent manufacturers from which goods are shipped to depots A and B. Customers 1 to 5 are served from depots A and B. In particular, Figure 1 shows a possible solution where two vehicles provide all needed goods to the 5 customers, using only depot A, avoiding the cost of opening depot B. 5 The term CDC will be preferred through this document.