Aggregation methodologies for perishability management in production and distribution system

An existing integrated model such as the production-inventory-routing-problem (PIDRP) can be used to generate operational decision in the planning horizon. However, for certain products, such as food, freshness of the product are also an important factor to be considered. Typically, determining the solutions for large instances of PIDRP is not possible. The contribution of this research is to propose two aggregation techniques that can manage large instances of PIDRP that consider perishability of products. The first technique is based on a clustering algorithm that considers constraints from delivery capacity. The second technique is a tailored aggregation for producing subsets of products that can be ordered jointly. Computational results show that the proposed techniques can be used to reduce problem size while maintaining good quality solution within acceptable run time. The gaps of the solutions for problem sets up to 30 retailers, 20 products and eight periods are less than 5%. [Received 8 December 2016; Revised 27 March 2017; Accepted 21 April 2017[