IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v37y2009i1p227-237.html
   My bibliography  Save this article

Improving routing and scheduling decisions at a distributor of industrial gasses

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-0483(06)00150-2
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hill, A. V. & Mabert, V. A. & Montgomery, D. W., 1988. "A decision support system for the courier vehicle scheduling problem," Omega, Elsevier, vol. 16(4), pages 333-345.
    2. Faulin, Javier, 2003. "Applying MIXALG procedure in a routing problem to optimize food product delivery," Omega, Elsevier, vol. 31(5), pages 387-395, October.
    3. Kim, Jung-Ug & Kim, Yeong-Dae, 1999. "A decomposition approach to a multi-period vehicle scheduling problem," Omega, Elsevier, vol. 27(4), pages 421-430, August.
    4. Wade, A. C. & Salhi, S., 2002. "An investigation into a new class of vehicle routing problem with backhauls," Omega, Elsevier, vol. 30(6), pages 479-487, December.
    5. Mole, RH & Johnson, DG & Wells, K, 1983. "Combinatorial analysis for route first-cluster second vehicle routing," Omega, Elsevier, vol. 11(5), pages 507-512.
    6. Ioannou, George & Kritikos, Manolis & Prastacos, Gregory, 2003. "A problem generator-solver heuristic for vehicle routing with soft time windows," Omega, Elsevier, vol. 31(1), pages 41-53, February.
    7. Du, Timon C. & Li, Eldon Y. & Chou, Defrose, 2005. "Dynamic vehicle routing for online B2C delivery," Omega, Elsevier, vol. 33(1), pages 33-45, February.
    8. Srivastava, R, 1993. "Alternate solution procedures for the location-routing problem," Omega, Elsevier, vol. 21(4), pages 497-506, July.
    9. Said Salhi & M. Sari & Doudja Saïdi-Kabeche & Nasséra Touati, 1992. "Adaptation of some Vehicle Fleet Mix heuristics," Post-Print halshs-00166301, HAL.
    10. Gilbert Laporte & Yves Nobert & Martin Desrochers, 1985. "Optimal Routing under Capacity and Distance Restrictions," Operations Research, INFORMS, vol. 33(5), pages 1050-1073, October.
    11. Sila Çetinkaya & Chung-Yee Lee, 2000. "Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 46(2), pages 217-232, February.
    12. Fagerholt, Kjetil & Lindstad, Håkon, 2000. "Optimal policies for maintaining a supply service in the Norwegian Sea," Omega, Elsevier, vol. 28(3), pages 269-275, June.
    13. T. William Chien & Anantaram Balakrishnan & Richard T. Wong, 1989. "An Integrated Inventory Allocation and Vehicle Routing Problem," Transportation Science, INFORMS, vol. 23(2), pages 67-76, May.
    14. S. Anily & A. Federgruen, 1990. "One Warehouse Multiple Retailer Systems with Vehicle Routing Costs," Management Science, INFORMS, vol. 36(1), pages 92-114, January.
    15. Nussbaum, M. & Sepulveda, M. & Cobian, A. & Gaete, J. & Parra, E. & Cruz, J., 1997. "A fuel distribution knowledge-based decision support system," Omega, Elsevier, vol. 25(2), pages 225-234, April.
    16. Salhi, S & Sari, M & Saidi, D & Touati, Nac, 1992. "Adaptation of some vehicle fleet mix heuristics," Omega, Elsevier, vol. 20(5-6), pages 653-660.
    17. R. D. Angel & W. L. Caudle & R. Noonan & A. Whinston, 1972. "Computer-Assisted School Bus Scheduling," Management Science, INFORMS, vol. 18(6), pages 279-288, February.
    18. Birendra K. Mishra & Srinivasan Raghunathan, 2004. "Retailer- vs. Vendor-Managed Inventory and Brand Competition," Management Science, INFORMS, vol. 50(4), pages 445-457, April.
    19. Ki Ling Cheung & Hau L. Lee, 2002. "The Inventory Benefit of Shipment Coordination and Stock Rebalancing in a Supply Chain," Management Science, INFORMS, vol. 48(2), pages 300-306, February.
    20. Walter J. Bell & Louis M. Dalberto & Marshall L. Fisher & Arnold J. Greenfield & R. Jaikumar & Pradeep Kedia & Robert G. Mack & Paul J. Prutzman, 1983. "Improving the Distribution of Industrial Gases with an On-Line Computerized Routing and Scheduling Optimizer," Interfaces, INFORMS, vol. 13(6), pages 4-23, December.
    21. Bektas, Tolga, 2006. "The multiple traveling salesman problem: an overview of formulations and solution procedures," Omega, Elsevier, vol. 34(3), pages 209-219, June.
    22. Awi Federgruen & Paul Zipkin, 1984. "A Combined Vehicle Routing and Inventory Allocation Problem," Operations Research, INFORMS, vol. 32(5), pages 1019-1037, October.
    23. Vishal Gaur & Marshall L. Fisher, 2004. "A Periodic Inventory Routing Problem at a Supermarket Chain," Operations Research, INFORMS, vol. 52(6), pages 813-822, December.
    24. Dimitris J. Bertsimas & David Simchi-Levi, 1996. "A New Generation of Vehicle Routing Research: Robust Algorithms, Addressing Uncertainty," Operations Research, INFORMS, vol. 44(2), pages 286-304, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Matías Núñez-Muñoz & Rodrigo Linfati & John Willmer Escobar, 2023. "Two-stage optimization scheme of routing scheduling from a single distribution center to multiple customers," Operational Research, Springer, vol. 23(2), pages 1-29, June.
    3. 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.
    4. Vidal, Thibaut & Laporte, Gilbert & Matl, Piotr, 2020. "A concise guide to existing and emerging vehicle routing problem variants," European Journal of Operational Research, Elsevier, vol. 286(2), pages 401-416.
    5. 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.
    6. 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.
    7. 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.
    8. Ramasesh, Ranga V., 2010. "Lot-sizing decisions under limited-time price incentives: A review," Omega, Elsevier, vol. 38(3-4), pages 118-135, June.
    9. Wenstøp, Fred & Koppang, Haavard, 2009. "On operations research and value conflicts," Omega, Elsevier, vol. 37(6), pages 1109-1120, December.
    10. 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.
    11. Almiñana, M. & Escudero, L.F. & Landete, M. & Monge, J.F. & Rabasa, A. & Sánchez-Soriano, J., 2010. "WISCHE: A DSS for water irrigation scheduling," Omega, Elsevier, vol. 38(6), pages 492-500, December.
    12. Stålhane, Magnus & Andersson, Henrik & Christiansen, Marielle & Fagerholt, Kjetil, 2014. "Vendor managed inventory in tramp shipping," Omega, Elsevier, vol. 47(C), pages 60-72.
    13. Avci, Mustafa & Yildiz, Seyda Topaloglu, 2019. "A matheuristic solution approach for the production routing problem with visit spacing policy," European Journal of Operational Research, Elsevier, vol. 279(2), pages 572-588.
    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. Furkan Uzar, M. & Çatay, Bülent, 2012. "Distribution planning of bulk lubricants at BP Turkey," Omega, Elsevier, vol. 40(6), pages 870-881.
    16. 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.
    17. 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.
    18. Sun Lee, Ik & Yoon, S.H., 2010. "Coordinated scheduling of production and delivery stages with stage-dependent inventory holding costs," Omega, Elsevier, vol. 38(6), pages 509-521, December.
    19. 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.
    20. Boctor, Fayez F. & Renaud, Jacques & Cornillier, Fabien, 2011. "Trip packing in petrol stations replenishment," Omega, Elsevier, vol. 39(1), pages 86-98, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leandro C. Coelho & Jean-François Cordeau & Gilbert Laporte, 2014. "Thirty Years of Inventory Routing," Transportation Science, INFORMS, vol. 48(1), pages 1-19, February.
    2. Anton J. Kleywegt & Vijay S. Nori & Martin W. P. Savelsbergh, 2002. "The Stochastic Inventory Routing Problem with Direct Deliveries," Transportation Science, INFORMS, vol. 36(1), pages 94-118, February.
    3. Anton J. Kleywegt & Vijay S. Nori & Martin W. P. Savelsbergh, 2004. "Dynamic Programming Approximations for a Stochastic Inventory Routing Problem," Transportation Science, INFORMS, vol. 38(1), pages 42-70, February.
    4. 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.
    5. le Blanc, H.M. & Cruijssen, F. & Fleuren, H.A. & de Koster, M.B.M., 2006. "Factory gate pricing: An analysis of the Dutch retail distribution," European Journal of Operational Research, Elsevier, vol. 174(3), pages 1950-1967, November.
    6. Song, Ruidian & Zhao, Lei & Van Woensel, Tom & Fransoo, Jan C., 2019. "Coordinated delivery in urban retail," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 126(C), pages 122-148.
    7. 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.
    8. Zhao, Qiu-Hong & Chen, Shuang & Zang, Cun-Xun, 2008. "Model and algorithm for inventory/routing decision in a three-echelon logistics system," European Journal of Operational Research, Elsevier, vol. 191(3), pages 623-635, December.
    9. Mohd Kamarul Irwan Abdul Rahim & El-Houssaine Aghezzaf & Veronique Limère & Birger Raa, 2016. "Analysing the effectiveness of vendor-managed inventory in a single-warehouse, multiple-retailer system," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(8), pages 1953-1965, June.
    10. Zhao, Qiu-Hong & Wang, Shou-Yang & Lai, K.K., 2007. "A partition approach to the inventory/routing problem," European Journal of Operational Research, Elsevier, vol. 177(2), pages 786-802, March.
    11. Jin-Hwa Song & Martin Savelsbergh, 2007. "Performance Measurement for Inventory Routing," Transportation Science, INFORMS, vol. 41(1), pages 44-54, February.
    12. Mirzapour Al-e-hashem, Seyed M.J. & Rekik, Yacine & Mohammadi Hoseinhajlou, Ebrahim, 2019. "A hybrid L-shaped method to solve a bi-objective stochastic transshipment-enabled inventory routing problem," International Journal of Production Economics, Elsevier, vol. 209(C), pages 381-398.
    13. Oğuz Solyalı & Haldun Süral, 2011. "A Branch-and-Cut Algorithm Using a Strong Formulation and an A Priori Tour-Based Heuristic for an Inventory-Routing Problem," Transportation Science, INFORMS, vol. 45(3), pages 335-345, August.
    14. Mosca, Alyssa & Vidyarthi, Navneet & Satir, Ahmet, 2019. "Integrated transportation – inventory models: A review," Operations Research Perspectives, Elsevier, vol. 6(C).
    15. Fokkema, Jan Eise & Land, Martin J. & Coelho, Leandro C. & Wortmann, Hans & Huitema, George B., 2020. "A continuous-time supply-driven inventory-constrained routing problem," Omega, Elsevier, vol. 92(C).
    16. Oğuz Solyalı & Jean-François Cordeau & Gilbert Laporte, 2012. "Robust Inventory Routing Under Demand Uncertainty," Transportation Science, INFORMS, vol. 46(3), pages 327-340, August.
    17. Qu, Wendy W. & Bookbinder, James H. & Iyogun, Paul, 1999. "An integrated inventory-transportation system with modified periodic policy for multiple products," European Journal of Operational Research, Elsevier, vol. 115(2), pages 254-269, June.
    18. Jafarian, Ahmad & Asgari, Nasrin & Mohri, Seyed Sina & Fatemi-Sadr, Elham & Farahani, Reza Zanjirani, 2019. "The inventory-routing problem subject to vehicle failure," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 126(C), pages 254-294.
    19. Claudia Archetti & Luca Bertazzi & Gilbert Laporte & Maria Grazia Speranza, 2007. "A Branch-and-Cut Algorithm for a Vendor-Managed Inventory-Routing Problem," Transportation Science, INFORMS, vol. 41(3), pages 382-391, August.
    20. Patrick Jaillet & Jonathan F. Bard & Liu Huang & Moshe Dror, 2002. "Delivery Cost Approximations for Inventory Routing Problems in a Rolling Horizon Framework," Transportation Science, INFORMS, vol. 36(3), pages 292-300, August.

    More about this item

    Keywords

    Routing Scheduling Application;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:37:y:2009:i:1:p:227-237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.