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Integrated districting, fleet composition, and inventory planning for a multi-retailer distribution system

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  • Dinçer Konur

    (Missouri University of Science and Technology)

  • Joseph Geunes

    (University of Arkansas)

Abstract

We study an integrated districting, fleet composition, and inventory planning problem for a multi-retailer distribution system. In particular, we analyze the districting decisions for a set of retailers such that the retailers within the same district share truck capacity for their shipment requirements. The number of trucks of each type dedicated to a retailer district and retailer inventory planning decisions are jointly determined in a district formation problem. We provide a mixed-integer-nonlinear programming formulation for this problem and develop a column generation based heuristic approach for its set partitioning formulation. To do so, we first characterize important properties of the optimal fleet composition and inventory planning decisions for a given retailer district. Then, we utilize these properties within a branch-and-price method to solve the integrated districting, fleet composition, and inventory planning problem. A set of numerical studies demonstrates the efficiency of the solution methods discussed for the investigated subproblems. An additional set of numerical studies compares the branch-and-price method to a commercial solver and an evolutionary heuristic method. Further numerical studies illustrate the economic as well as environmental benefits of the integrated modeling approach for various settings.

Suggested Citation

  • Dinçer Konur & Joseph Geunes, 2019. "Integrated districting, fleet composition, and inventory planning for a multi-retailer distribution system," Annals of Operations Research, Springer, vol. 273(1), pages 527-559, February.
    • Handle: RePEc:spr:annopr:v:273:y:2019:i:1:d:10.1007_s10479-016-2338-6
    DOI: 10.1007/s10479-016-2338-6
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