Agri-food supply chains with stochastic demands: A multi-period inventory routing problem with perishable products

Abstract

This paper considers an agri-food supply chain with a single fresh food supplier, who owns a central warehouse that serves several retail centers. Retail centers carry a certain amount of inventory of the fresh product, which is prone to deterioration. The supplier makes both inventory and routing decisions to minimize the inventory, transportation, food-waste, and stock-out costs in the face of stochastic customer demand and perishable products that need to be delivered to each retail center. This inventory routing problem is known as perishable inventory routing problem (PIRP) with stochastic demands in the literature. We model it using a mixed integer program and propose a simheuristic algorithm, which integrates Monte Carlo simulation within an iterated local search, to solve it. Our experiments show that the proposed algorithm can improve the initial solution with reasonable computational times. The resulting procedure is easy to implement and is applicable to other domains where a multi-period PIRP with stochastic demands may appear.