A new cooperative depot sharing approach for inventory routing problem

Mehmet Onur Olgun () and Erdal Aydemir
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Mehmet Onur Olgun: Suleyman Demirel University, Engineering Faculty, Dept. of Industrial Engineering
Erdal Aydemir: Suleyman Demirel University, Engineering Faculty, Dept. of Industrial Engineering

Annals of Operations Research, 2021, vol. 307, issue 1, No 19, 417-441

Abstract: Abstract This paper addresses cooperative game theory based bi-objective inventory routing problem, where replenishment plans are assumed as a coalition structure. Particularly, a distribution system is a set of customers that may order a single product from unique wholesalers to satisfy their own demands. When the products are carried from one depot to customers, transportation and inventory costs are incurred and some of the customers have insufficient depot capacity to their order levels. Therefore, in this paper, customers are willing to cooperate for cost saving benefits, where the depots are cooperatively used by each other with additional cost. The cooperative inventory game is established. An application is performed in a furniture roving parts company with the Shapley value cost allocation methods. The main objective of the study is to make a new replenishment plan for the demand of the customers, while meet the demands by sharing each other's depots and inventory routing costs. In addition, an improvement of 1.67% is obtained in vehicle utilization. Moreover, the proposed distribution method makes it possible to satisfy all customers demand for their own period. It helps customers who do not satisfy the demand into the warehouse, the three other most free capacitive customers can take the excess orders into their warehouse which are included in the coalition. As a result, a new effective replenishment plan has been obtained that it is economical to bear the additional costs.

Keywords: Cooperative game theory; Inventory routing; Replenishment plans; Shapley value (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10479-021-04122-z

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