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A sample average approximation-based heuristic for the stochastic production routing problem

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  • Andreas Geiger

    (University of Hamburg)

Abstract

The Production Routing Problem under demand uncertainty is an integrated problem containing production, inventory, and distribution decisions. At the planning level, the aim is to meet retailers demand, when only the demand distribution is known in advance, while minimizing the corresponding costs. In this study, a two-stage formulation is presented in which the routing can be adjusted at short notice. In the first stage, only production decisions are made, while delivery and inventory quantities and retailer visit schedules are determined in the second stage. To handle a large number of scenarios, two solution methods based on Sample Average Approximation are introduced. Furthermore, the impact of the routing quality is explored by applying a simple heuristic and an effective metaheuristic on the routing part. It is shown that, on average, the simple heuristic within an adjustable Sample Average Approximation approach provides better objective function values than the metaheuristic within a non-adjustable approach. Also all solution approaches outperform an expected value based approach in terms of runtime and objective function value.

Suggested Citation

  • Andreas Geiger, 2025. "A sample average approximation-based heuristic for the stochastic production routing problem," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 33(1), pages 121-144, March.
  • Handle: RePEc:spr:cejnor:v:33:y:2025:i:1:d:10.1007_s10100-024-00913-4
    DOI: 10.1007/s10100-024-00913-4
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    References listed on IDEAS

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    1. Yossiri Adulyasak & Jean-François Cordeau & Raf Jans, 2014. "Optimization-Based Adaptive Large Neighborhood Search for the Production Routing Problem," Transportation Science, INFORMS, vol. 48(1), pages 20-45, February.
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    4. Yossiri Adulyasak & Jean-François Cordeau & Raf Jans, 2015. "Benders Decomposition for Production Routing Under Demand Uncertainty," Operations Research, INFORMS, vol. 63(4), pages 851-867, August.
    5. Vishal Gaur & Marshall L. Fisher, 2004. "A Periodic Inventory Routing Problem at a Supermarket Chain," Operations Research, INFORMS, vol. 52(6), pages 813-822, December.
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