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Using truck-inventory-cost to obtain solutions to multi-period logistics models

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  • Ali, Agha Iqbal
  • O'Connor, Debra J.

Abstract

The antithetic opposition between the cost of inventory and the fixed cost of transportation, which leads to multiple alternate near-optima, can be a primary contributor to the computational intractability of the mixed integer program for a two-echelon multi-period distribution system. To alleviate the computational intractability, we develop a heuristic procedure that determines the deployments of trucks to, and the consequent levels of inventory at, the second echelon thereby reducing the number of variables in the model. The reduced model is shown to identify near optimal solutions for the entire distribution system in negligible computation time.

Suggested Citation

  • Ali, Agha Iqbal & O'Connor, Debra J., 2013. "Using truck-inventory-cost to obtain solutions to multi-period logistics models," International Journal of Production Economics, Elsevier, vol. 143(1), pages 144-150.
    • Handle: RePEc:eee:proeco:v:143:y:2013:i:1:p:144-150
    DOI: 10.1016/j.ijpe.2012.12.022
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    References listed on IDEAS

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    1. Martin Grunewald & Thomas Volling & Christoph Müller & Thomas S. Spengler, 2018. "Multi-item single-source ordering with detailed consideration of transportation capacities," Journal of Business Economics, Springer, vol. 88(7), pages 971-1007, September.

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