Abstract
AbstractThis paper presents a detailed study concerning the importance of the planning horizon when solving inventory routing problems (IRPs). We evaluate the quality of decisions obtained by solving a finite‐horizon IRP. We also discuss the relevance of explicitly considering profit maximization models rather than the traditional cost minimization variant. As a means to this end, we describe four classes of the IRP corresponding to different types of markets. Two of them lead to nonlinear models, which are linearized. Furthermore, we provide a deterministic simulator to evaluate the long‐term effects arising from using planning horizons of varying lengths when solving the IRP. A computational study is performed on cases generated from benchmark data instances. The results confirm that the long‐term performance of the IRP decisions is, in part, contingent on the length of the selected planning horizon. They also show that considering profit maximization instead of cost minimization leads to different decisions, generating considerably more revenue and profits, albeit not nearly as much as suggested by individual solutions to static IRPs with short planning horizons.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Transactions in Operational Research
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
