Optimizing the long-term costs of an Inventory Routing Problem using linear relaxation

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dc.contributor.authorChiu, Agustin
dc.contributor.authorAngulo, Gustavo
dc.contributor.authorLarrain, Homero
dc.date.accessioned2025-01-20T17:07:00Z
dc.date.available2025-01-20T17:07:00Z
dc.date.issued2024
dc.description.abstractThe Inventory Routing Problem (IRP) arises in logistics operations when routing and inventory decisions are made simultaneously. In this work, some ideas to improve the long-term performance of the rolling horizon strategy are explored. First, three simple modifications to the IRP are tested to improve its long-term performance: using safety stocks, defining minimum inventory levels for the last period of the planning horizon, and using an artificial discount rate in the objective function. We use this improved IRP as a benchmark. Then, a solution strategy is proposed where an approximation is used in the final periods of the planning horizon, which is based on the linear relaxation of the IRP. The algorithm is calibrated and, through simulation, compared to the benchmark on a set of randomly generated instances with up to 30 customers, three vehicles, and 20 periods, and different costs and uncertainty levels. It is shown that the proposed algorithm is, on average, three times faster than the benchmark and generates savings between 1% and 2%. Under favorable conditions (low uncertainty, low inventory cost, and one vehicle), it can generate savings of around 10% in long-term costs.
dc.description.funderChilean Fund for Scientific and Technological Development (FONDECYT) , Chile
dc.fuente.origenWOS
dc.identifier.doi10.1016/j.tre.2024.103447
dc.identifier.eissn1878-5794
dc.identifier.issn1366-5545
dc.identifier.urihttps://doi.org/10.1016/j.tre.2024.103447
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/90828
dc.identifier.wosidWOS:001196613000001
dc.language.isoen
dc.revistaTransportation research part e-logistics and transportation review
dc.rightsacceso restringido
dc.subjectInventory Routing Problem
dc.subjectLinear relaxation
dc.subjectLong-term costs
dc.subjectRolling horizon
dc.subjectSimulation
dc.subject.ods11 Sustainable Cities and Communities
dc.subject.odspa11 Ciudades y comunidades sostenibles
dc.titleOptimizing the long-term costs of an Inventory Routing Problem using linear relaxation
dc.typeartículo
dc.volumen183
sipa.indexWOS
sipa.trazabilidadWOS;2025-01-12
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