The Inventory Routing Problem Under Uncertainty

Abstract

In the inventory routing problem, the supplier acts as a central decision maker who determines the replenishment quantities and also, the delivery times and routes to all retailers. In “Inventory Routing Problem Under Uncertainty”, Cui et al. develop a novel framework for the uncertain inventory routing problem and allow ambiguity in the probability distribution of each retailer's uncertain demand. Adopting a service-level viewpoint, they minimize the risk of uncertain inventory levels violating a prespecified acceptable range. They quantify that risk using a new decision criterion, the service violation index, that accounts for how often and how severely the inventory requirement is violated. The solutions proposed here are adaptive in the sense that they vary with the realization of uncertain demand. They provide algorithms to solve the problem exactly and then, demonstrate the superiority of their solutions by comparing them with several benchmarks.