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Heuristic algorithms for inventory replenishment with perishable products and multiple transportation modes

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  • Gökçe Palak
  • Sandra Duni Ekşioğlu
  • Joseph Geunes

Abstract

This study extends classic economic lot-sizing problems to permit the replenishment of age-dependent perishable inventories via multiple transportation modes. Inventory replenishment costs include a multiple-setup cost function that considers order setup, purchase, and cargo container costs. The objective is to identify the timing of orders, order quantities, and a choice from among I transportation modes that minimizes the cost of replenishing perishable inventories during a planning horizon of length T. We present a mixed-integer programming formulation of this problem and characterize properties of optimal solutions. We propose a primal-dual heuristic algorithm that runs in O(IT2). In addition, we provide heuristic algorithms for two special cases of the problem involving one or two replenishment modes. For the single replenishment mode problem, we propose (i) a dynamic programming algorithm that explores solutions that satisfy the Zero Inventory Ordering Policy and runs in O(T2) and (ii) a dynamic programming algorithm that explores solutions that satisfy the Less-than-Truckload first positioning property and runs in O(T3). For the two replenishment mode problem, we present a knapsack-based algorithm that identifies the minimum number of cargo containers required to meet demand. The running time of this algorithm is O(T2). We evaluate the quality of the solutions generated by these different approaches via extensive numerical analyses.

Suggested Citation

  • Gökçe Palak & Sandra Duni Ekşioğlu & Joseph Geunes, 2018. "Heuristic algorithms for inventory replenishment with perishable products and multiple transportation modes," IISE Transactions, Taylor & Francis Journals, vol. 50(4), pages 345-365, April.
    • Handle: RePEc:taf:uiiexx:v:50:y:2018:i:4:p:345-365
    DOI: 10.1080/24725854.2017.1405296
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    References listed on IDEAS

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    1. B C Giri & T Maiti, 2012. "Supply chain model for a deteriorating product with time-varying demand and production rate," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 63(5), pages 665-673, May.
    2. Akbalik, Ayse & Rapine, Christophe, 2018. "Lot sizing problem with multi-mode replenishment and batch delivery," Omega, Elsevier, vol. 81(C), pages 123-133.
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    Cited by:

    1. Yongho Lee & Taesu Cheong, 2022. "Service Level Constrained Distribution-Free Newsvendor Problem with Balking Penalty," Mathematics, MDPI, vol. 10(14), pages 1-14, July.
    2. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    3. Fan, Jie & Ou, Jinwen, 2023. "On dynamic lot sizing with bounded inventory for a perishable product," Omega, Elsevier, vol. 119(C).

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