Three-Phase Methodology Incorporating Scatter Search for Integrated Production, Inventory, and Distribution Routing Problem

This paper proposes the use of scatter search metaheuristic to solve an integrated production, inventory, and distribution routing problem. The problem is based on a single production plant that produces a single product that is delivered to N geographically dispersed customers by a set of homogenous fleet of vehicles. The objective is to construct a production plan and delivery schedule to minimize the total costs and ensuring each customer’s demand is met over the planning horizon. We assumed that excess production can be stored at the plant or at customer’s sites within some limits, but stockouts due to backordering or backlogging are not allowed. Further testing on a set of benchmark problems to assess the effectiveness of our method is also carried out. We compare our results to the existing metaheuristic algorithms proposed in the literature.