Inventory Routing Problem

Vendor Managed Inventory (VMI) provides a new chance for suppliers to overcome the problem of "trade-off between transportation and inventory and reduce logistics costs by means of whole plan of transportation and inventory. From the angle of managerial operational research, the Inventory Routing Problem (IRP) in this paper is devoted to solve, taking into consideration the integration and optimization of inventory and transportation, inventory supplement and vehicle routing problem which have to be determined in plan function step at the level of operation in logistics management.In China, however, whether the research on IRP or the application in the logistics strategies involving inventory control and transport routing appear weak in current rapidly developing logistics research and practice. Consequently, this paper is meant to discuss IRP theoretically, and illustrate the conclusion of discussion in practice. In order to achieve this goal, this paper arranges contents as follows.In the first place, in order to develop an understanding of IRP, this paper introduces its research background, theoretical and practical significance, in addition, its research objects, sphere and characteristics on the basis of the analysis and summary of corresponding literature. The research object of this paper is single product logistics distribution system of one-many network with the properties of D-System. It makes a discussion about fixed plan period IRP under definite condition of customer demand, and explains why it does so. Then it introduces the general solution of IRP, two-phase method, namely, dividing IRP into two sub-problems of inventory supplement and vehicle routing, then solving respectively these sub-problems in the two consecutive phases.Secondly, in the first phase, this paper solves the inventory supplement sub-problem through integer programming model, using the reduction of vehicle routes as the breakthrough to this problem, divides a whole distribution region into many customer subsets by radius-circle partitioning method, determines the optimal number of vehicle of service distribution region, applies two practice-oriented conclusions to reduce the number ofroutes on the basis of customer grouping, thus decreases considerably the variable scale of integer programming, and solves the problem through professional software to fix inventory supplement plan in plan period.Afterwards, in the second phase, based on the inventory supplement plan in the first phase, this paper transforms the sub-problem in this phase into vehicle routing problem with time window constrains through the theories and methods of VRP, and solves this problem by way of genetic algorithm, to make a final complete inventory supplement and transportation plan.Moreover, this paper testifies the conclusions of theoretical discussion by a logistics case, and illustrates the efficiency of solutions in every phase, the decision continuity between phases and the guidance significance of final solution to practical distribution operation.