Multi-period inventory/distribution planning in two-level inventory systems

Abstract

This dissertation focuses on multi-period inventory/distribution planning in two-level inventory systems consisting of a warehouse and many geographically dispersed retailers. Products are distributed from the warehouse to the retailers by a fleet of vehicles. We determine vehicle routes and schedules and delivery quantities for retailers with the objective of minimizing transportation costs for product delivery and inventory holding costs at retailers over a given planning horizon. In this dissertation, we consider the following three problems related to inventory and distribution planning of the system. First, we consider a multi-period vehicle scheduling problem (MPVSP) in a transportation system where a fleet of homogeneous vehicles delivers products of a single type from a central depot to multiple (N) retailers. For the MPVSP, a two-phase heuristic algorithm is suggested based on a k-th shortest path algorithm. In the first phase of the algorithm, the MPVSP is decomposed into N single-retailer problems by ignoring the number of vehicles available. The single-retailer problem is formulated as the shortest path problem and several good delivery schedules are generated for each retailer using the k-th shortest path algorithm assuming the exact requirement policy is used in the system. In the exact requirement policy, replenishments occur only when the inventory level is zero. In the second phase, a set of vehicle schedules is selected from those generated in the first phase. The vehicle schedule selection problem, which is a generalized assignment problem, is solved by a heuristic based on the k-th shortest path algorithm. Secondly, we consider a multi-period inventory/distribution planning problem (MPIDP) in a one-warehouse multi-retailer distribution system where a fleet of heterogeneous vehicles delivers products from a warehouse to several retailers. It is assumed that vehicles can make several round trips between the warehouse and the ret...