A two phase variable neighborhood search for the multi-product inventory routing problem

We address a multi-product inventory routing problem and propose a two-phase Variable Neighborhood Search (VNS) metaheuristic to solve it. In the first phase, VNS is used to solve a capacitated vehicle routing problem at each period to find an initial solution without taking into account the inventory. In the second phase, we iteratively improve the initial solution while minimizing both the transportation and inventory costs. For this, we propose two different algorithms, a Variable Neighborhood Descent and a Variable Neighborhood Search. We present an heuristic and a Linear Programming formulation, which are applied after each local search move, to determine the amount of products to collect from each supplier at each period. During the exploration, we use priority rules for suppliers and vehicles, based on the current delivery schedule over the planning horizon. Computational results show the efficiency of the proposed two-phase approach. (C) 2013 Elsevier Ltd. All rights reserved.