The Fixed-Partition Policy Inventory Routing Problem

Ali Diabat (), Claudia Archetti () and Waleed Najy ()
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Ali Diabat: Division of Engineering, New York University Abu Dhabi, Abu Dhabi, United Arab Emirates; Tandon School of Engineering, New York University, Brooklyn, New York 11201
Claudia Archetti: Department of Information Systems, Decision Sciences and Statistics, ESSEC Business School, 95000 Cergy, France
Waleed Najy: Division of Engineering, New York University Abu Dhabi, Abu Dhabi, United Arab Emirates

Transportation Science, 2021, vol. 55, issue 2, 353-370

Abstract: In this paper, we formally introduce a variant of the inventory routing problem (IRP) that we call the fixed-partition policy IRP (FPP-IRP). In contrast to the classical IRP in which delivery routes are arbitrary, the FPP-IRP partitions customers into mutually exclusive clusters that are fixed throughout the optimization horizon, and distribution is performed separately for each cluster. By restricting the flexibility inherent in the classical IRP, the FPP-IRP attains many potential advantages. First, partitioning reduces the operational complexity of the system and allows a simpler organization of the distribution service. Second, it improves the robustness of the system by isolating disruptions to affected clusters. Third, it can fit the needs and requirements of specific applications in which consistency in the distribution policy, such as familiarity between customers and drivers and route invariance, is required. We present two fixed-partition policies for the IRP together with mathematical formulations and valid inequalities. We also present a worst-case analysis on the performance of these policies. Extensive computational results are presented to show the behavior of these policies and glean insights into their potential benefits.

Keywords: inventory routing problem; fixed-partition policies; consistent routing (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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