A MODEL AND TWO HEURISTIC METHODS FOR THE MULTI-PRODUCT INVENTORY-LOCATION-ROUTING PROBLEM WITH HETEROGENEOUS FLEET

Abstract

The Multi-Product Inventory-Location-Routing Problem with heterogeneous eet considers a supply chain, which comprises multipleproducers, potential distribution centers (DCs) with opening capacity levelsand geographically scattered retailers each of which has deterministic demandover a discrete planning horizon. The goal is determining a set of DCs with theircapacity levels to open, assigning retailers to the opened DCs, finding productquantities to be ordered by and distributed from opened DCs and determiningthe eet and routes to satisfy the demands of retailers with minimum cost. Amixed-integer linear programming model is proposed to describe the problem,which is strengthened by two valid inequalities. Since the commercial solver canonly solve the very small-sized instances within a reasonable time, two heuristicmethods are developed. Results show that the proposed valid inequalities are effective and both methods provide important savings in acceptable run timescompared to the commercial solver