The storage constrained, inbound inventory routing problem

Purpose – This paper aims to describe the storage constrained, inbound inventory routing problem and presents bounds and heuristics for solutions to this problem. It also seeks to analyze various characteristics of this problem by comparing the solutions generated by the two proposed heuristics with each other and with the lower bound solutions. Design/methodology/approach – The proposed heuristics use a sequential decomposition strategy for generating solutions for this problem. These heuristics are evaluated on a set of problem instances which are based on an actual application in the automotive manufacturing industry. Findings – The storage space clearly has a significant effect on both the routing and inventory decisions, and there are complex and interesting interactions between the problem factors and performance measures. Practical implications – Facility design decisions for the storage of inbound materials should carefully consider the impact of storage space on transportation and logistics costs. Originality/value – This problem occurs in a number of different industrial applications while most of the existing literature addresses outbound distribution. Other papers that address similar problems do not consider all of the practical constraints in the problem or do not adequately benchmark and analyze their proposed solutions.