Stochastic Demand Inventory Routing Problem With Soft Time Windows

In recent years a new inventory management method Vendor Managed Inventory (VMI) has been put forwarded. The thought of VMI offers a new chance for supplies to conquer the trade-off conflict between transportation and inventory and implement the goal of lowering the distribution cost by making overall plans of transportation and inventory. Inventory Routing Problem (IRP) is a question how to optimize the transportation and inventory simultaneously, and it is also the key question in the process of VMI.After analyzing and summarizing the relative literatures, it is found that the research of the Stochastic Demand Inventory Routing Problem with Soft Time Windows (IRPSTW) is weak. But in the real life, the Time Windows universally exist. So this paper tries to make a useful study of the Stochastic Demand Inventory Routing Problem with Soft Time Windows, and the solution is as paper [1] described. Though the algorithm is same, a Soft Time Windows is added to this paper. The solution is as follows:Firstly, we formulate a discrete time Markov Decision Process model of the Stochastic Demand Inventory Routing Problem with Soft Time Windows. Then we present a solution approach that uses decomposition and optimization to approximate the value function. Thirdly, we discuss the day-to-day control of the IRPSTW process using a three-step local search heuristic. In the end of the paper, some cases of IRPSTW are modeled. The results prove that the solution of the IRP is influenced to a great extent by the Time Windows, and also prove that the method this paper proposed can handle the IRPSTW usefully.