A Two-Phase Iterative Heuristic Approach for the Production Routing Problem

A Two-Phase Iterative Heuristic Approach for the Production Routing Problem

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Article ID: iaor20164333
Volume: 49
Issue: 4
Start Page Number: 784
End Page Number: 795
Publication Date: Nov 2015
Journal: Transportation Science
Authors: , , ,
Keywords: transportation: general, heuristics, combinatorial optimization, inventory, decision, production, simulation, programming: travelling salesman, vehicle routing & scheduling, distribution
Abstract:

This paper investigates the integrated optimization of production, distribution, and inventory decisions related to supplying multiple retailers from a central production facility. A single‐item capacitated lot‐sizing problem is defined for optimizing production decisions and inventory management. The optimization of daily distribution is modeled as a traveling salesman problem or a vehicle routing problem depending on the number of vehicles. A two‐phase iterative method, from which several heuristics are derived, is proposed that iteratively focuses on lot‐sizing and distribution decisions. Computational results show that our best heuristic outperforms existing methods.

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