Scenario Tree-Based Heuristics for Stochastic Inventory-Routing Problems
Lars Magnus Hvattum, Arne Løkketangen, Gilbert Laporte
INFORMS Journal on Computing · 2009 · Volume 21 · Issue 2
Abstract
In vendor-managed inventory replenishment, the vendor decides when to make deliveries to customers, how much to deliver, and how to combine shipments using the available vehicles. This gives rise to the inventory-routing problem in which the goal is to coordinate inventory replenishment and transportation to minimize costs. The problem tackled in this paper is the stochastic inventory-routing problem, where stochastic demands are specified through general discrete distributions. The problem is formulated as a discounted infinite-horizon Markov decision problem. Heuristics based on finite scenario trees are developed. Computational results confirm the efficiency of these heuristics.
Keywords
inventory routing, stochastic, heuristic, scenario
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