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A practical solution approach for the cyclic inventory routing problem

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  • Raa, Birger
  • Aghezzaf, El-Houssaine

Abstract

Vendor managed inventory (VMI) is an example of effective cooperation and partnering practices between up- and downstream stages in a supply chain. In VMI, the supplier takes the responsibility for replenishing his customers' inventories based on their consumption data, with the aim of optimizing the over all distribution and inventory costs throughout the supply chain. This paper discusses the challenging optimization problem that arises in this context, known as the inventory routing problem (IRP). The objective of this IRP problem is to determine a distribution plan that minimizes average distribution and inventory costs without causing any stock-out at the customers. Deterministic constant customer demand rates are assumed and therefore, a long-term cyclical approach is adopted, integrating fleet sizing, vehicle routing, and inventory management. Further, realistic side-constraints such as limited storage capacities, driving time restrictions and constant replenishment intervals are taken into account. A heuristic solution approach is proposed, analyzed and evaluated against a comparable state-of-the-art heuristic.

Suggested Citation

  • Raa, Birger & Aghezzaf, El-Houssaine, 2009. "A practical solution approach for the cyclic inventory routing problem," European Journal of Operational Research, Elsevier, vol. 192(2), pages 429-441, January.
  • Handle: RePEc:eee:ejores:v:192:y:2009:i:2:p:429-441
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Li, Ming & Wang, Zheng & Chan, Felix T.S., 2016. "A robust inventory routing policy under inventory inaccuracy and replenishment lead-time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 290-305.
    2. Li, Jianxiang & Chu, Feng & Chen, Haoxun, 2011. "A solution approach to the inventory routing problem in a three-level distribution system," European Journal of Operational Research, Elsevier, vol. 210(3), pages 736-744, May.
    3. Edirisinghe, N.C.P. & James, R.J.W., 2014. "Fleet routing position-based model for inventory pickup under production shutdown," European Journal of Operational Research, Elsevier, vol. 236(2), pages 736-747.
    4. Holzapfel, Andreas & Hübner, Alexander & Kuhn, Heinrich & Sternbeck, Michael G., 2016. "Delivery pattern and transportation planning in grocery retailing," European Journal of Operational Research, Elsevier, vol. 252(1), pages 54-68.
    5. Schmid, Verena & Doerner, Karl F. & Laporte, Gilbert, 2013. "Rich routing problems arising in supply chain management," European Journal of Operational Research, Elsevier, vol. 224(3), pages 435-448.
    6. Soysal, Mehmet & Bloemhof-Ruwaard, Jacqueline M. & Haijema, Rene & van der Vorst, Jack G.A.J., 2015. "Modeling an Inventory Routing Problem for perishable products with environmental considerations and demand uncertainty," International Journal of Production Economics, Elsevier, vol. 164(C), pages 118-133.
    7. Aksen, Deniz & Kaya, Onur & Sibel Salman, F. & Tüncel, Özge, 2014. "An adaptive large neighborhood search algorithm for a selective and periodic inventory routing problem," European Journal of Operational Research, Elsevier, vol. 239(2), pages 413-426.
    8. Li, Kunpeng & Chen, Bin & Sivakumar, Appa Iyer & Wu, Yong, 2014. "An inventory–routing problem with the objective of travel time minimization," European Journal of Operational Research, Elsevier, vol. 236(3), pages 936-945.
    9. Divsalar, Ali & Vansteenwegen, Pieter, 2016. "A two-phase algorithm for the cyclic inventory routing problemAuthor-Name: Chitsaz, Masoud," European Journal of Operational Research, Elsevier, vol. 254(2), pages 410-426.
    10. Vansteenwegen, Pieter & Mateo, Manuel, 2014. "An iterated local search algorithm for the single-vehicle cyclic inventory routing problem," European Journal of Operational Research, Elsevier, vol. 237(3), pages 802-813.
    11. Raa, Birger, 2015. "Fleet optimization for cyclic inventory routing problems," International Journal of Production Economics, Elsevier, vol. 160(C), pages 172-181.
    12. Zenker, Michael & Emde, Simon & Boysen, Nils, 2016. "Cyclic inventory routing in a line-shaped network," European Journal of Operational Research, Elsevier, vol. 250(1), pages 164-178.
    13. Raa, Birger & Dullaert, Wout, 2017. "Route and fleet design for cyclic inventory routing," European Journal of Operational Research, Elsevier, vol. 256(2), pages 404-411.
    14. Li, Jianxiang & Chen, Haoxun & Chu, Feng, 2010. "Performance evaluation of distribution strategies for the inventory routing problem," European Journal of Operational Research, Elsevier, vol. 202(2), pages 412-419, April.
    15. Bender, Matthias & Meyer, Anne & Kalcsics, Jörg & Nickel, Stefan, 2016. "The multi-period service territory design problem – An introduction, a model and a heuristic approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 96(C), pages 135-157.

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