An optimization model based decision support tools for inventory-routing rescheduling problem

Abstract

The present work addresses Inventory-Routing Rescheduling Problem (IRRP) in case of possible changes in the execution time of pre-planned scheduling of an Inventory-Routing Problem (IRP). Due to the complexity of the process of departing from one pre-planned scheduling IRP to a rescheduling IRP, a decision-support tool was devised in this study to help decision-makers. This complexity derives from the changes occurring in an agreed-upon schedule including the used capacity of the vehicle, total distance, and other factors that need a re-agreement negotiation, which directly relates to the agreed-upon costs, especially when a carrier contractor is responsible for the distribution of goods between customers. Although one may want to stick to the pre-planned scheduling, the changes in predicted data of the problem at the time of execution require a new optimized solution. The proposed approach applies mathematical modeling to the optimization of the rescheduled problem and conducts sensitivity analysis to study the effect of the adjustment of different variables (carried load, distance, etc.).