Article ID: | iaor200632 |
Country: | Germany |
Volume: | 32 |
Issue: | 1 |
Start Page Number: | 93 |
End Page Number: | 118 |
Publication Date: | May 2005 |
Journal: | Journal of Global Optimization |
Authors: | Romeijn H. Edwin, Sindhuchao Sombat, Akali Elif, Boondiskulchok Rein |
Keywords: | programming: linear |
In this paper, we develop a mathematical programming approach for coordinating inventory and transportation decisions in an inbound commodity collection system. In particular, we consider a system that consists of a set of geographically dispersed suppliers that manufacture one or more non-identical items, and a central warehouse that stocks these items. The warehouse faces a constant and deterministic demand for the items from outside retailers. The items are collected by a fleet of vehicles that are dispatched from the central warehouse. The vehicles are capacitated, and must also satisfy a frequency constraint. Adopting a policy in which each vehicle always collects the same set of items, we formulate the inventory-routing problem of minimizing the long-run average inventory and transportation costs as a set partitioning problem. We employ a column generation approach to determine a lower bound on the total costs, and develop a branch-and-price algorithm that finds the optimal assignment of items to vehicles. We also propose greedy constructive heuristics, and develop a very large-scale neighborhood search algorithm to find near-optimal solutions for the problem. Computational tests are performed on a set of randomly generated problem instances.