A new algorithm for solving the inventory routing problem with direct shipment

Abstract

  In this paper a multi-commodity multi-period inventory routing problem in a two-echelon supply chain consisting of a manufacturer and a set of retailers has been studied. In addition to inventory management and distribution planning, production planning has also been considered in the above problem. The objective is to minimize total system cost that consists of production setup, inventory holding and distribution costs. The commodities are delivered to the retailers by an identical fleet of limited capacity vehicles through direct shipment strategy. Also it is assumed that production and storage capacity is limited and stockout is not allowed. Since similar problems without distribution planning are known as NP-hard, this is also an NP-hard problem. Therefore, in this paper, a new improved particle swarm optimization algorithm has been developed consisting of two distinguished phases for problem solving. First, the values of binary variables are determined using the proposed algorithm and then, the continuous variables are calculated by solving a linear programming model. Performance of the proposed algorithm has been compared with genetic and original particle swarm optimization algorithms using various samples of random problems. The findings imply significant performance of the proposed algorithm.         

Keywords

• Supply chain
• Inventory routing problem
• Direct shipping strategy
• Particle swarm optimization
• Production-distribution planning