Bridging the Linear-Quadratic Gap: A Quantum-Classical Hybrid Approach to Robust Supply Chain Design

TL;DR

This paper demonstrates that quantum-inspired optimization methods can effectively bridge the gap between linear and quadratic models in urban supply chain design, leading to more robust and diversified facility placement strategies.

Contribution

It introduces a quantum-inspired approach that improves supply chain robustness by capturing quadratic interactions, outperforming classical greedy algorithms in urban logistics networks.

Findings

Quantum-inspired methods reduce operational overlap risk by 21.8%.

The approach achieves only 3.2% demand loss compared to optimal solutions.

Diversified facility placement enhances stability in urban supply chains.

Abstract

The design of supply chain networks in densely populated urban logistics systems faces a timely dilemma: the traditional optimisation approaches are effective to maximise the level of demand perfusion, but they are limited to embracing large expenses in overlapping the facilities and cannibalisation in the market. When tested on a high-fidelity digital twin of the Delhi NCR road network of thirty candidate sites, we establish that Classical Greedy algorithms using the theoretical maximum demand of (473 units) lack any theoretical overlap penalty, but incur a prohibitive overlap penalty (5.08). Here, in comparison, the Quantum-Inspired solution only losses 3.2% of demand (450 compared to 465 units relative to the optimal solution), but the solution preserves 21.8% less operational overlap risk (3.26 compared to 4.17), which can be viewed as a 35.8% improvement compared to the Greedy solution. Geospatial analysis shows that it can be attributed to a shift in strategies: This, in contrast to Classical approaches, which focus on locating facilities in the high-density central areas (North/Central Delhi), the quantum-inspired solver autonomously chooses the diversified topology of the North-south network, penetrating into the underserved periphery growth markets. This is a spatially balanced arrangement which is congruent to the polycentric structure of modern time megacities, and displays better stability to volatility in demand. We have shown that quantum-inspired optimisation methods can close the so-called Linear-Quadratic Gap phenomenon, i.e. the systematic inability of greedy methods to capture the actual quadratic interactions between facilities, and offer a way of computing the pathway to operationally robust and risk-optimised supply chain networks in dense urban conditions.