Hybrid heuristics for the inventory-location-routing problem

Solving the Inventory Location-Routing Problem can been seen as an approach to optimize both a supply chain design and its operations costs. Assumptions consider that vehicles might visit more than one retailer per route and that inventory management decisions are included for a multi-depot, multi-retailer system with storage capacity over a discrete time planning horizon. The problem is to determine the set of candidate depots to open, the quantities to ship from suppliers to depots and from depots to retailers per period, and the sequence in which retailers are replenished by an homogeneous capacitated fleet of vehicles. A mixed-integer linear programming model is proposed to describe the problem. Since the model is not able to solve exactly the targeted instances within a reasonable computation time, a hybrid method, embedding an exact approach within a heuristic scheme, is presented. Its performance is tested over instances for the inventory location routing, location-routing and inventory-routing problems.