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 language | English |
|---|---|
| Pages (from-to) | 168-184 |
| Number of pages | 17 |
| Journal | European Journal of Industrial Engineering |
| Volume | 11 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 1 Jan 2017 |
Funding
This work was partly supported by the Natural Sciences and Engineering Research Council of Canada (NSERC). This support is gratefully acknowledged. We also thank Calcul Qu?bec for providing computing facilities. We thank our contact persons at the offices of our industrial partner.
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