Robust Inventory Routing Under Demand Uncertainty

Oğuz Solyalı (), Jean-François Cordeau () and Gilbert Laporte ()
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Oğuz Solyalı: Business Administration Program, Middle East Technical University, Northern Cyprus Campus, Kalkanli, TRNC, Mersin 10, Turkey
Jean-François Cordeau: CIRRELT and Canada Research Chair in Logistics and Transportation, HEC Montréal, Montréal H3T 2A7, Canada
Gilbert Laporte: CIRRELT and Canada Research Chair in Distribution Management, HEC Montréal, Montréal H3T 2A7, Canada

Transportation Science, 2012, vol. 46, issue 3, 327-340

Abstract: This paper introduces a robust inventory routing problem where a supplier distributes a single product to multiple customers facing dynamic uncertain demands over a finite discrete time horizon. The probability distribution of the uncertain demand at each customer is not fully specified. The only available information is that these demands are independent and symmetric random variables that can take some value from their support interval. The supplier is responsible for the inventory management of its customers, has sufficient inventory to replenish the customers, and distributes the product using a capacitated vehicle. Backlogging of the demand at customers is allowed. The problem is to determine the delivery quantities as well as the times and routes to the customers, while ensuring feasibility regardless of the realized demands, and minimizing the total cost composed of transportation, inventory holding, and shortage costs. Using a robust optimization approach, we propose two robust mixed integer programming (MIP) formulations for the problem. We also propose a new MIP formulation for the deterministic (nominal) case of the problem. We implement these formulations within a branch-and-cut algorithm and report results on a set of instances adapted from the literature.

Keywords: inventory routing problem; lot sizing; robust optimization; integer programming; branch-and-cut (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:46:y:2012:i:3:p:327-340

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