Synchronized routing of seasonal products through a production/distribution network

This paper presents a multi-period vehicle routing problem for a large-scale production and distribution network. The vehicles must be routed in such a way as to minimize travel and inventory costs over a multi-period horizon, while also taking retailer demands and the availability of products at a central production facility into account. The network is composed of one distribution center and hundreds of retailers. Each retailer has its demand schedule representing the total number of units of a given product that should have been received on a given day. Many high value products are distributed. Product availability is determined by the production facility, whose production schedule determines how many units of each product must be available on a given day. To distribute these products, the routes of a heterogeneous fleet must be determined for a multiple period horizon. The objective of our research is to minimize the cost of distributing products to the retailers and the cost of maintaining inventory at the facility. In addition to considering product availability, the routing schedule must respect many constraints, such as capacity restrictions on the routes and the possibility of multiple vehicle trips over the time horizon. In the situation studied, no more than 20 product units could be carried by a single vehicle, which generally limited the number of retailers that could be supplied to one or two per route. This article proposes a mathematical formulation, as well as some heuristics, for solving this single-retailer-route vehicle routing problem. Extensions are then proposed to deal with the multiple-retailer-route situation.