Inventory Routing Problems : a multiobjective approach

Logistic activities, from a certain point of view, are often structured around two concepts, the transportation of goods and the management of the same goods. Of course, these two activities are highly interlinked. It is possible to combine at the same time the problem of defining the amount of goods that have to be shipped (the Inventory Management problem – the quantity decision) and the routes that have to be taken by the vehicle for delivering the same goods (the Vehicle Routing Problem – the routing decision). These two problems intersect to a considerable degree and have been given a name : the Inventory Routing Problem. Recent research can be found in [2, 3]. The academics and the people in industry have a completely different view of this problem. Academics are usually searching for statistical or stochastic laws, but reality is more complex. In our relation with different companies, we have observed that they have a partial knowledge of the demand over the planning horizon. Hence, we propose a new type of data for further experimental investigations. Demand of the current period is known at the beginning of the period. In addition, an approximate overview of the demand is known for the 5 next periods, the 20 next periods and the 60 next periods. This prediction is rather good (differing from reality by not more than ±10%). The global objective of our research is to provide practical optimization methods to companies involved in inventory routing problems, taking into account this new type of data. This work is a long term research project and in a first phase, we focused on the Inventory Routing problem with a single product, deterministic known demand over a finite horizon. In one of the recent paper [1], the authors assume that the routing costs and the inventory costs are comparable and used as a single combined objective. In our case, we are going to handle the two costs as separate objectives. To our knowledge, this is the first time that a bi-objective approach is considered for this problem.