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A Combined Vehicle Routing and Inventory Allocation Problem

Author

Listed:
  • Awi Federgruen

    (Columbia University, New York, New York)

  • Paul Zipkin

    (Columbia University, New York, New York)

Abstract

We address the combined problem of allocating a scarce resource among several locations, and planning deliveries using a fleet of vehicles. Demands are random, and holding and shortage costs must be considered in the decision along with transportation costs. We show how to extend some of the available methods for the deterministic vehicle routing problem to this case. Computational results using one such adaptation show that the algorithm is fast enough for practical work, and that substantial cost savings can be achieved with this approach.

Suggested Citation

  • Awi Federgruen & Paul Zipkin, 1984. "A Combined Vehicle Routing and Inventory Allocation Problem," Operations Research, INFORMS, vol. 32(5), pages 1019-1037, October.
    • Handle: RePEc:inm:oropre:v:32:y:1984:i:5:p:1019-1037
    DOI: 10.1287/opre.32.5.1019
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