Abstract
Integration of various logistical components in supply chain management, such as transportation, inventory control and facility location are becoming common practice to avoid sub-optimization in nowadays’ competitive environment. The integration of transportation and inventory decisions is known as inventory routing problem (IRP) in the literature. The problem aims to determine the delivery quantity for each customer and the network routes to be used in each period, so that the total inventory and transportation costs are to be minimized. On the contrary of conventional IRP that each retailer can only provide its demand from the supplier, in this paper, a new multi-period, multi-item IRP model with considering lateral trans-shipment, back-log and financial decisions is proposed as a business model in a distinct organization. The main purpose of this paper is applying an applicable inventory routing model with considering real world setting and solving it with an appropriate method.
Highlights
Nowadays in manufacturing business, especially supply chain issues, there is a rising need for efficient behavior because of competition and reduced profit margins
Numerical results of new proposed algorithm comparing with GAMS are showed that the proposed algorithm produce good answers and the unique chromosome represented for the proposed solving methodology is adaptive with the essence of inventory routing problem (IRP)
Motivated by real world and analyzing gap in literature, a new MILP model for multi-period, multi-item IRP with considering lateral trans-shipment and financial decisions is proposed and the model is solved with a new hybrid Genetic Algorithm (GA)-Particle Swarm Optimization (PSO) meta-heuristic algorithm
Summary
Especially supply chain issues, there is a rising need for efficient behavior because of competition and reduced profit margins. Production actors and service providers in the transport industry are facing a more challenging situation compared to last decades. They have to plan the benefit of the whole chain instead of their own company. The integration of transportation and inventory decisions in literature is represented by IRP. It is to determine the delivery quantity for each customer and a set of feasible vehicle routes for the delivery of the quantities in each period, subject to the vehicle capacity constraints and the customers’ product requirements and inventory capacity constraints, so that a total inventory and transportation cost is minimized
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