Abstract
Distribution centers (DCs) typically receive orders from the customers (mostly retail stores) located in their vicinity and deliver the ordered goods the next day morning. To maintain high item fill rate, DCs have to hold a high level of inventory, which will increase inventory cost. As an alternative, cross-filling is that, after closing the daily order receipt, DCs exchange surplus items during the night to reduce the shortage. The economic justification of such cross-filling will depend on the tradeoff between extra transshipment and handling cost versus saved shortage cost. In this paper, as an extension of Rim and Jiang, 2019, vehicles are allowed to drop and pick up items at the intermediate DCs in the route. We present a genetic algorithm to determine the routes and amount to pick up/drop at each DC to minimize the total cost.
Highlights
The shortage at distribution centers (DCs) will very likely lead to the shortage of the item at the retail stores, which will result in sales loss and negative impact on the consumers’ satisfaction
E vehicle routing problem (VRP) with backhauls (VRPB) is a related problem with TVRSPD, where a vehicle picks up goods after finishing all deliveries, and both actions are in one route [14]
We proposed a solution procedure for the transshipment vehicle routing problem for cross-filling multiple items among multiple DCs, where simultaneous pickup and delivery is allowed in the routes (TVRSPD)
Summary
(4) In VRPSPD, all pickup and delivery demands at each customer must be met as constraints, while in TVRSPD, it is not a constraint but only the objective function of minimizing the total cost will determine how many of which items to pick up and drop at where. E VRP with backhauls (VRPB) is a related problem with TVRSPD, where a vehicle picks up goods after finishing all deliveries, and both actions are in one route [14]. Centralized transshipment problem is to minimize the total cost incurred on all locations, while the decentralized one is that each location tries to maximize its own profit by determining the quantity and price of items for transshipment Another classification is that transshipment can be either proactive or reactive. Rim and Jiang [33] proposed a linear programming model for the simplified multi-item, multi-DC problem where transshipment is allowed only between pairs of DCs. e proposed LP model determines the optimal number of items and number of trucks to transship. e model allows the “simultaneous chain transshipment,” which enables distant locations to supply surplus to the location that faces shortage. is simultaneous chain transshipment of items can be a practical tool for the cases where surplus is not available in its vicinity, but surplus from far distant sites can reach the needing site by simultaneously moving the items in a supply chain
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