Solving IRP using location based heuristics

Inventory routing problems (IRPs) occur where vendor managed inventory replenishment strategies are implemented in supply chains. These problems are characterized by the presence of both transportation and inventory considerations, either as parameters or constraints. The research presented in this paper aims at extending IRP formulation developed on the basis of location based heuristics proposed by Bramel and Simchi-Levi and continued by Hanczar. In the first phase of proposed algorithms, mixed integer programming is used to determine the partitioning of customers as well as dates and quantities of deliveries. Then, using 2-opt algorithm for solving the traveling sales-person problem the optimal routes for each partition are determined. In the main part of research the classical formulation is extended by additional constraints (visit spacing, vehicle filling rate, driver (vehicle) consistency, and heterogeneous fleet of vehicles) as well as the additional criteria are discussed. Then the impact of using each of proposed extensions for solution possibilities is evaluated. The results of computational tests are presented and discussed. Obtained results allow to conclude that the location based heuristics should be considered when solving real life instances of IRP.