Multi-item production routing problem with backordering: a MILP approach

Nadjib Brahimi and Tarik Aouam

International Journal of Production Research, 2016, vol. 54, issue 4, 1076-1093

Abstract: The aim of this paper is to present mixed integer linear programming formulations for the production routing problem with backordering (PRP-B) and a new hybrid heuristic to solve the problem. The PRP-B is considered in the context of a supply chain consisting of a production facility with limited production and storage capacities and geographically dispersed points of sale with limited storage capacities. The PRP-B integrates multiple item lot sizing decisions and vehicle routing decisions to the points of sale, where backordering of end customer demands is allowed at a penalty. Two integrated mixed integer programming models are formulated and a solution procedure consisting of a relax-and-fix heuristic combined with a local search algorithm is proposed. The numerical results show that this hybrid heuristic outperforms a state-of-the-art MIP commercial solver, in terms of solution quality and CPU times.

Date: 2016
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DOI: 10.1080/00207543.2015.1047971

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