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Combining service frequency and vehicle routing for managing supplier shipments

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  • Dong, Zhijie
  • Turnquist, Mark A.

Abstract

This paper proposes a new approach to designing inbound material collection routes that considers pick-up frequency and spatial design as joint decisions to minimize total logistics (transportation plus inventory) cost. The clustering-based optimization uses an approximation to the actual cost of a routing solution without actual route construction. We show that the problem is analogous to a single-source fixed-charge facility location problem, and near-optimal solutions can be found using an efficient heuristic algorithm. Tests show the effectiveness of how this model is formulated and a case study demonstrates that substantial total cost savings can be achieved in realistic applications.

Suggested Citation

  • Dong, Zhijie & Turnquist, Mark A., 2015. "Combining service frequency and vehicle routing for managing supplier shipments," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 79(C), pages 231-243.
    • Handle: RePEc:eee:transe:v:79:y:2015:i:c:p:231-243
    DOI: 10.1016/j.tre.2015.05.002
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    Cited by:

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    8. Masoud Chitsaz & Jean-François Cordeau & Raf Jans, 2019. "A Unified Decomposition Matheuristic for Assembly, Production, and Inventory Routing," INFORMS Journal on Computing, INFORMS, vol. 31(1), pages 134-152, February.

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