An Integrated Inventory Allocation and Vehicle Routing Problem: a GA Solution Approch

Nowadays by increasing the use of Vendor Managed Inventory (VMI) concepts, we observe many cases in all industries where one partner of supply chain is responsible for both transportation and inventory management. In this environment integrated mathematical models become more and more important. In the literature, problems that integrate inventory allocation decisions and vehicle routing problem (VRP) is called Inventory Routing Problem (IRP). IRP deals with how to manage the activity of supplying one or several goods from one origin to several destinations during finite or infinite time horizon, considering both routing and inventory issues. In this paper we introduce an efficient mixed integer linear programming (MILP) model for IRP. For this model formulation, we extend a well-known vehicle routing problem (VRP) formulation to IRP. Also, we propose a binary chromosome representation to implement a GA algorithm. Finally, in order to evaluate the efficiency of proposed heuristic we design some experiments and solve them by both proposed algorithm and Cplex 12.2.

Keywords:

vendor manged inventory , vehicle routing , inventory , inventory routing , genetic algorithm