The Online Distribution System of Inventory-Routing Problem with Simultaneous Deliveries and Returns Concerning CO2 Emission Cost

Gia-Shie Liu,Kuo-Ping Lin

doi:10.3390/math8061002

Abstract

This study attempts to consider CO2 emission cost to propose an online distribution system of inventory-routing problem with simultaneous deliveries and returns (IRPSDRCO2). The proposed IRPSDRCO2 mathematical models will be developed to find the total inventory routing cost, the CO2 emission cost, the optimal delivery routes, the economic order quantities, the optimal reordering points, the optimal service levels, the optimal common review interval, and the optimal maximum inventory levels for all retail stores delivered in these scheduled routes. The proposed IRPSDRCO2 model further applies the savings method, the target insert heuristic method, the target exchange heuristic method, and the repeated target heuristic method to find the optimal solution and the related scheduled routing plan. The sensitivity analyses will be conducted for this proposed IRPSDRCO2 model based on different parameters to provide very helpful decision-making information for a distribution system design. The performance of the proposed repeated target heuristic method is demonstrated to be better than most of four other combination methods regarding both the inventory routing cost and CPU running time. Consequently, it should be very helpful for logistics firms to design their distribution system by following the structure and the detailed procedure flow of the online distribution system developed by this study.

Highlights

Introduction and Literature ReviewProfessional logistics companies in Taiwan usually deliver general products from depot to all retail stores by considering the trade-off relationship between transportation cost and inventory cost, which comprise the greatest part of total logistics cost
PRIRPSDRCO2 ) are developed to find the optimal scheduled delivery routes, the economic order quantities, the optimal reordering points, the optimal service levels, the optimal common review interval, and the optimal maximum inventory levels for all retail stores delivered in these proposed routes
From the perspective of decision making on this proposed inventory routing problem, the above result means that the decision makers should first deliver all products through eight planned optimal delivery routes to all retail stores, which carry out the related reordering inventory control policies

Summary

Introduction

Introduction and Literature ReviewProfessional logistics companies in Taiwan usually deliver general products from depot to all retail stores by considering the trade-off relationship between transportation cost and inventory cost, which comprise the greatest part of total logistics cost. Most IRP studies often apply transportation cost, holding cost, and ordering cost to design the related distribution system, but few of them use safety cost and shortage cost to conduct the routing plan. Reference [4] considers inventory holding cost, safety cost, shortage cost, ordering cost, and transportation cost to develop a decision support system of a green inventory-routing problem. Publishing products such as newspapers, magazines, books, greeting cards, and catalogs have the characteristic of a high return percentage [10].

Methods

Results

Conclusion