Integrated Districting, Fleet Composition, and Inventory Planning for a Multi-Retailer Distribution System

Abstract

We study an integrated districting, fleet composition, and inventory planning problem for a multi-retailer distribution system. In particular, we analyze the districting decisions for a set of retailers such that the retailers within the same district share truck capacity for their shipment requirements. The number of trucks of each type dedicated to a retailer district and retailer inventory planning decisions are jointly determined in a district formation problem. We provide a mixed-integer-nonlinear programming formulation for this problem and develop a column generation based heuristic approach for its set partitioning formulation. To do so, we first characterize important properties of the optimal fleet composition and inventory planning decisions for a given retailer district. Then, we utilize these properties within a branch-and-price method to solve the integrated districting, fleet composition, and inventory planning problem. A set of numerical studies demonstrates the efficiency of the solution methods discussed for the investigated subproblems. An additional set of numerical studies compares the branch-and-price method to a commercial solver and an evolutionary heuristic method. Further numerical studies illustrate the economic as well as environmental benefits of the integrated modeling approach for various settings.

Department(s)

Engineering Management and Systems Engineering

Research Center/Lab(s)

Intelligent Systems Center

Keywords and Phrases

Distribution; Districting; Fleet composition; Inventory management

International Standard Serial Number (ISSN)

0254-5330; 1572-9338

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2019 Springer Verlag, All rights reserved.

Publication Date

01 Feb 2019

Link to Full Text

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