A solution approach to the inventory routing problem in a three-level distribution system
We consider the infinite horizon inventory routing problem in a three-level distribution system with a vendor, a warehouse and multiple geographically dispersed retailers. In this problem, each retailer faces a demand at a deterministic, retailer-specific rate for a single product. The demand of each retailer is replenished either from the vendor through the warehouse or directly from the vendor. Inventories are kept at both the retailers and the warehouse. The objective is to determine a combined transportation (routing) and inventory strategy minimizing a long-run average system-wide cost while meeting the demand of each retailer without shortage. We present a decomposition solution approach based on a fixed partition policy where the retailers are partitioned into disjoint and collectively exhaustive sets and each set of retailers is served on a separate route. Given a fixed partition, the original problem is decomposed into three sub-problems. Efficient algorithms are developed for the sub-problems by exploring important properties of their optimal solutions. A genetic algorithm is proposed to find a near-optimal fixed partition for the problem. Computational results show the performance of the solution approach.
Year of publication: |
2011
|
---|---|
Authors: | Li, Jianxiang ; Chu, Feng ; Chen, Haoxun |
Published in: |
European Journal of Operational Research. - Elsevier, ISSN 0377-2217. - Vol. 210.2011, 3, p. 736-744
|
Publisher: |
Elsevier |
Subject: | Logistics Distribution Inventory routing Multi-echelon |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Performance evaluation of distribution strategies for the inventory routing problem
Li, Jianxiang, (2010)
-
A solution approach to the inventory routing problem in a three-level distribution system
Li, Jianxiang, (2011)
-
Maximizing the net present value of a project under uncertainty
Li, Jianxiang, (2010)
- More ...