“A New Integrated Clustering and Routing Algorithm for an Inventory Routing Problem”
by Ali Ekici
Inventory Routing Problem (IRP) arises from vendor-managed inventory business settings where the supplier is responsible for replenishing the inventories of its customers over a planning horizon. In IRP, the supplier makes the routing and inventory decisions together to improve the overall performance of the system. More specifically, the supplier decides (i) when to replenish each customer, (ii) how much to deliver to each customer, and (iii) how to route delivery vehicles between the depot and the customers. In this talk, we present a heuristic framework that integrates clustering and routing phases for an inventory routing problem where the supplier’s goal is to minimize total transportation cost over a planning horizon while avoiding stock-outs at the customer locations. In the clustering phase, we partition the customer set into clusters such that a single vehicle serves each cluster. In the routing phase, we develop the delivery schedule for each cluster. The novelty of the proposed approach is that it takes the three main decisions (when to deliver, how much to deliver and how to route) into account when partitioning the customer set and forming the delivery schedule for each cluster. We compare the proposed solution approach against the ones in the literature and obtain significantly better results in terms of both the number of instances that have been solved and the quality of the solution found. Since the proposed clustering approach is quite generic, we foresee that it can be used for other routing algorithms as well.
Ali Ekici is an Associate Professor in the Department of Industrial Engineering at Ozyegin University. He holds PhD and MS degrees in Industrial and Systems Engineering from Georgia Institute of Technology, and BS degrees in Industrial Engineering and Mathematics from Middle East Technical University. His research experience and interests are in the field of health and humanitarian logistics, disease spread modeling, vehicle/inventory routing and scheduling/packing applications. He has published in prestigious journals including MSOM, Transportation Science, Naval Research Logistics and Computers & Operations Research. His research is supported by TUBITAK grants.