Considering Production Planning in the Multi-period Inventory Routing Problem with Transshipment between Retailers

Authors

1 Indusrial Engineering, University of Kurdistan

2 Indusrial Engineering, Tarbiat Modares University,Tehran, Iran

Abstract

Generally, the inventory routing problem occurs in a supply chain where customers consider the supplier responsible for inventory replenishment. In this situation, the supplier finds the answer to questions regarding the time and quantity of delivery to the customer as well as the sequence of customers in the routes. Considering the effect of production decisions on answering these questions, the present paper examines the integrated decision making on production, routing and inventory in a two-echelon supply chain composed of a manufacturer and multiple retailers. Transshipment, as a policy in supply chain logistic which increase integration and decrease inventory cost, is also allowed between retailers. The mathematical formulation for the problem is developed and an adaptive large neighborhood search heuristic is proposed to solve this complicated problem. The results of numerical experiments show that the solutions yielded by the heuristic method have high efficiency.

Keywords