Solving a vendor-managed inventory routing problem arising in the distribution of bottled water in Morocco

Jamal Lmariouh, Leandro C. Coelho, Nizar Elhachemi, Gilbert Laporte, Anouar Jamali, Driss Bouami

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

In this paper we solve a real-life distribution problem faced by a Moroccan bottled water company dealing with a combination of inventory and distribution decisions. To manage its distribution process, the company uses a vendor-managed inventory system, which means that the supplier controls the inventory at the customers. This problem is known as the inventory-routing problem (IRP) in which both transportation and inventory costs are simultaneously minimised. Our real-life problem contains several types of bottled water that must be shipped from a supplier to a set of regional depots and wholesalers. Inventory costs are paid at both the plant and at the customers, and shipments are performed by a fleet of homogeneous vehicles. We propose an ad-hoc modification of IRP models and branch-and-cut algorithms. Computational tests were carried out on fifteen real-life-based instances. The results show that significant savings of almost 10% can be obtained.

Original languageEnglish
Pages (from-to)168-184
Number of pages17
JournalEuropean Journal of Industrial Engineering
Volume11
Issue number2
DOIs
Publication statusPublished - 1 Jan 2017

Keywords

  • Bottled water
  • Branch-and-cut
  • Expert system
  • Inventory-routing problem
  • IRP
  • Multi-product
  • Multi-vehicle
  • Vendor-managed inventory

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering

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