A MODEL AND TWO HEURISTIC METHODS FOR THE MULTI-PRODUCT INVENTORY-LOCATION-ROUTING PROBLEM WITH HETEROGENEOUS FLEET

The Multi-Product Inventory-Location-Routing Problem with heterogeneous fleet considers a supply chain, which comprises multiple producers, potential distribution centers (DCs) with opening capacity levels and geographically scattered retailers each of which has deterministic demand over a discrete planning horizon. The goal is determining a set of DCs with their capacity levels to open, assigning retailers to the opened DCs, finding product quantities to be ordered by and distributed from opened DCs and determining the fleet and routes to satisfy the demands of retailers with minimum cost. A mixed-integer linear programming model is proposed to describe the problem, which is strengthened by two valid inequalities. Since the commercial solver can only solve the very small-sized instances within a reasonable time, two heuristic methods are developed. Results show that the proposed valid inequalities are effective and both methods provide important savings in acceptable run times compared to the commercial solver.