A new hybrid GA-PSO method for solving multi-period inventory routing problem with considering financial decisions

Abstract

Integration of various logistical components in supply chain management, such as transportation, inventory control and facility location are becoming common practice to avoid sub-optimization in nowadays’ competitive environment. The integration of transportation and inventory decisions is known as inventory routing problem (IRP) in the literature. The problem aims to determine the delivery quantity for each customer and the network routes to be used in each period, so that the total inventory and transportation costs are to be minimized. On the contrary of conventional IRP that each retailer can only provide its demand from the supplier, in this paper, a new multi-period, multi-item IRP model with considering lateral trans-shipment, back-log and financial decisions is proposed as a business model in a distinct organization. The main purpose of this paper is applying an applicable inventory routing model with considering real world setting and solving it with an appropriate method.