Cyclic Delivery Schedules for an Inventory Routing Problem

We consider an inventory routing problem where a common vendor is responsible for replenishing the inventories of several customers over a perpetual time horizon. The objective of the vendor is to minimize the total cost of transportation of a single product from a single depot to a set of customers with deterministic and stationary consumption rates over a planning horizon while avoiding stock‐outs at the customer locations. We focus on constructing a repeatable (cyclic) delivery schedule for the product delivery. We propose a novel algorithm, called the Iterative Clustering‐Based Constructive Heuristic Algorithm, to solve the problem in two stages: (i) clustering, and (ii) delivery schedule generation. To test the performance of the proposed algorithm in terms of solution quality and computational efficiency, we perform a computational study on both randomly generated instances and real‐life instances provided by an industrial gases manufacturer. We also compare the performance of the proposed algorithm against an algorithm developed for general routing problems.