Min–Max exact and heuristic policies for a two-echelon supply chain with inventory and transportation procurement decisions

Luca Bertazzi, Adamo Bosco and Demetrio Laganà

Transportation Research Part E: Logistics and Transportation Review, 2016, vol. 93, issue C, 57-70

Abstract: We study the problem in which one supplier delivers a product to a set of retailers over time by using an outsourced fleet of vehicles. Since the probability distribution of the demand is not known, we provide a Min–Max approach to find robust policies. We show that the optimal Min-Expected Value policy can be very poor in the worst case. We provide a Min–Max Dynamic Programming formulation that allows us to exactly solve the problem in small instances. Finally, we implement a Min–Max Matheuristic to solve benchmark instances and show that it is very effective.

Keywords: Inventory; Transportation procurement; Uncertain demand; Min–Max policies; Dynamic programming; Matheuristic algorithms (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.tre.2016.05.008

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