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Improving routing and scheduling decisions at a distributor of industrial gasses

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  • Day, Jamison M.
  • Daniel Wright, P.
  • Schoenherr, Tobias
  • Venkataramanan, Munirpallam
  • Gaudette, Kevin

Abstract

This paper investigates cyclical inventory replenishment for a company's regional distribution center that supplies, distributes, and manages inventory of carbon dioxide (CO2) at over 900 separate customer sites in Indiana. The company previously experienced high labor costs with excessive overtime and maintained a regular back-log of customers experiencing stockouts. To address these issues we implemented a three-phase heuristic for the cyclical inventory routing problem encountered at one of the company's distribution centers. This heuristic determines regular routes for each of three available delivery vehicles over a 12-day delivery horizon while improving four primary performance measures: delivery labor cost, stockouts, delivery regularity, and driver-customer familiarity. It does so by first determining three sets of cities (one for each delivery vehicle) that must be delivered to each day based on customer requirements. Second, the heuristic assigns the remaining customers in other cities to one of the three "backbone routes" determined in phase 1. And third, it balances customer deliveries on each daily route over the schedule horizon. Through our methodology, we were able to significantly reduce overtime, driving time, and labor costs while improving customer service.

Suggested Citation

  • Day, Jamison M. & Daniel Wright, P. & Schoenherr, Tobias & Venkataramanan, Munirpallam & Gaudette, Kevin, 2009. "Improving routing and scheduling decisions at a distributor of industrial gasses," Omega, Elsevier, vol. 37(1), pages 227-237, February.
  • Handle: RePEc:eee:jomega:v:37:y:2009:i:1:p:227-237
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    Cited by:

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    8. Overholts II, Dale L. & Bell, John E. & Arostegui, Marvin A., 2009. "A location analysis approach for military maintenance scheduling with geographically dispersed service areas," Omega, Elsevier, vol. 37(4), pages 838-852, August.
    9. Chen, Lu & Chen, Yuyi & Langevin, André, 2021. "An inverse optimization approach for a capacitated vehicle routing problem," European Journal of Operational Research, Elsevier, vol. 295(3), pages 1087-1098.
    10. Wei, Yi-Ming & Mi, Zhi-Fu & Huang, Zhimin, 2015. "Climate policy modeling: An online SCI-E and SSCI based literature review," Omega, Elsevier, vol. 57(PA), pages 70-84.
    11. Federica Cucchiella & Idiano D’Adamo & Massimo Gastaldi & S.C. Lenny Koh, 2014. "Implementation of a real option in a sustainable supply chain: an empirical study of alkaline battery recycling," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(6), pages 1268-1282, June.
    12. Low, Chinyao & Chang, Chien-Min & Li, Rong-Kwei & Huang, Chia-Ling, 2014. "Coordination of production scheduling and delivery problems with heterogeneous fleet," International Journal of Production Economics, Elsevier, vol. 153(C), pages 139-148.
    13. Stålhane, Magnus & Andersson, Henrik & Christiansen, Marielle & Fagerholt, Kjetil, 2014. "Vendor managed inventory in tramp shipping," Omega, Elsevier, vol. 47(C), pages 60-72.
    14. Bertazzi, Luca & Moezi, Sarem Deilami & Maggioni, Francesca, 2021. "The value of integration of full container load, less than container load and air freight shipments in vendor–managed inventory systems," International Journal of Production Economics, Elsevier, vol. 241(C).
    15. Bertazzi, Luca & Bosco, Adamo & Laganà, Demetrio, 2015. "Managing stochastic demand in an Inventory Routing Problem with transportation procurement," Omega, Elsevier, vol. 56(C), pages 112-121.
    16. Anirudh Subramanyam & Chrysanthos E. Gounaris, 2018. "A Decomposition Algorithm for the Consistent Traveling Salesman Problem with Vehicle Idling," Transportation Science, INFORMS, vol. 52(2), pages 386-401, March.
    17. Lai, Peng-Jen & Lee, Wen-Chiung, 2011. "Single-machine scheduling with general sum-of-processing-time-based and position-based learning effects," Omega, Elsevier, vol. 39(5), pages 467-471, October.
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    20. Huang, Shan-Huen & Lin, Pei-Chun, 2015. "Vehicle routing–scheduling for municipal waste collection system under the “Keep Trash off the Ground” policy," Omega, Elsevier, vol. 55(C), pages 24-37.

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    Keywords

    Routing Scheduling Application;

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