A heuristic approach for solving serially distributed storage depots under general-integer policy

In this study, we present the problems of shipping a single product from a single supply origin, through a serial system of storage depots, to a single demand destination by trucks or ships, and aim to minimize the sum of ordering, inventory and transportation costs over an infinite time horizon. We formulate the problem consisting of general-integer (GI), stationary and nested replenishment policies for the multistage inventory/distribution system. This paper presents the near-optimal cost-curve structure analysis for this serially distributed storage depot problem (SDSDP) and show that the ordering quantities for each storage depot always comply with the GI replenishment policy. Moreover, we develop a heuristic approach, which is based on an efficient search procedure to obtain satisfactory results. A comparison of the results obtained from the proposed heuristic method has been made with that from the LINGO® software on randomly generated problems. The proposed heuristic is the first solution approach in the literature to solve the single link problems based on the cost-curve structure analysis. Furthermore, we provide an important foundation for carrying out investigations on lot sizing and distribution problems with other supply chain configurations.