Variable Neighborhood Search heuristic for the Inventory Routing Problem in fuel delivery

In this paper we observe the extension of the vehicle routing problem (VRP) in fuel delivery that includes petrol stations inventory management and which can be classified as the Inventory Routing Problem (IRP) in fuel delivery. The objective of the IRP is to minimize the total cost of vehicle routing and inventory management. We developed a Variable Neighborhood Search (VNS) heuristic for solving a multi-product multi-period IRP in fuel delivery with multi-compartment homogeneous vehicles, and deterministic consumption that varies with each petrol station and each fuel type. The stochastic VNS heuristic is compared to a Mixed Integer Linear Programming (MILP) model and the deterministic ''compartment transfer'' (CT) heuristic. For three different scale problems, with different vehicle types, the developed VNS heuristic outperforms the deterministic CT heuristic. Also, for the smallest scale problem instances, the developed VNS was capable of obtaining the near optimal and optimal solutions (the MILP model was able to solve only the smallest scale problem instances).

[1]  Said Salhi,et al.  An Efficient Hybrid Genetic Algorithm for the MultiProduct Multi Period Inventory Routing Problem , 2011 .

[2]  Abdellah El-Fallahi,et al.  A memetic algorithm and a tabu search for the multi-compartment vehicle routing problem , 2008, Comput. Oper. Res..

[3]  Louis M. Dalberto,et al.  Improving the Distribution of Industrial Gases with an On-Line Computerized Routing and Scheduling Optimizer , 1983 .

[4]  Pasquale Avella,et al.  Solving a fuel delivery problem by heuristic and exact approaches , 2004, Eur. J. Oper. Res..

[5]  Jean-Yves Potvin,et al.  An Exchange Heuristic for Routeing Problems with Time Windows , 1995 .

[6]  Shuang Chen,et al.  Model and algorithm for inventory/routing decision in a three-echelon logistics system , 2008, Eur. J. Oper. Res..

[7]  Jacques Renaud,et al.  Trip packing in petrol stations replenishment , 2011 .

[8]  Emmanouil E. Zachariadis,et al.  An integrated local search method for inventory and routing decisions , 2009, Expert Syst. Appl..

[9]  Feng Chu,et al.  A solution approach to the inventory routing problem in a three-level distribution system , 2011, Eur. J. Oper. Res..

[10]  Saïd Salhi,et al.  Inventory routing problems: a logistical overview , 2007, J. Oper. Res. Soc..

[11]  Martin W. P. Savelsbergh,et al.  Production , Manufacturing and Logistics Vendor managed inventory for environments with stochastic product usage , 2009 .

[12]  Marielle Christiansen,et al.  Industrial aspects and literature survey: Combined inventory management and routing , 2010, Comput. Oper. Res..

[13]  Bülent Çatay,et al.  Distribution planning of bulk lubricants at BP Turkey , 2012 .

[14]  W. L. Ng,et al.  Petrol delivery tanker assignment and routing: a case study in Hong Kong , 2008, J. Oper. Res. Soc..

[15]  Feng Chu,et al.  Large scale stochastic inventory routing problems with split delivery and service level constraints , 2012, Ann. Oper. Res..

[16]  Martin W. P. Savelsbergh,et al.  A Decomposition Approach for the Inventory-Routing Problem , 2004, Transp. Sci..

[17]  Franz Rothlauf,et al.  Vehicle routing with compartments: applications, modelling and heuristics , 2011, OR Spectr..

[18]  Jacques Desrosiers,et al.  Solving a rich vehicle routing and inventory problem using column generation , 2010, Comput. Oper. Res..

[19]  Feng Chu,et al.  A Lagrangian relaxation approach for a multi-mode inventory routing problem with transshipment in crude oil transportation , 2011, Comput. Chem. Eng..

[20]  Pierre Hansen,et al.  Variable neighborhood search: Principles and applications , 1998, Eur. J. Oper. Res..

[21]  Gilbert Laporte,et al.  A heuristic for the multi-period petrol station replenishment problem , 2008, Eur. J. Oper. Res..

[22]  Gilbert Laporte,et al.  An exact algorithm for the petrol station replenishment problem , 2008, J. Oper. Res. Soc..

[23]  Wei-Ting Lee,et al.  A heuristic method for the inventory routing problem with time windows , 2011, Expert Syst. Appl..

[24]  Pierre Hansen,et al.  Variable Neighborhood Search , 2018, Handbook of Heuristics.

[25]  Gerald G. Brown,et al.  Real-Time, Wide Area Dispatch of Mobil Tank Trucks , 1987 .

[26]  M. Salomon,et al.  Reconsidering the distribution structure of gasoline products for a large oil company , 1995 .

[27]  Shu-Chu Liu,et al.  Variable neighborhood search for the inventory routing and scheduling problem in a supply chain , 2012, Expert Syst. Appl..

[28]  Martin W. P. Savelsbergh,et al.  Delivery strategies for blood products supplies , 2009, OR Spectr..

[29]  Riccardo Minciardi,et al.  Economic and Risk Implications in the Distribution of Petrol Products to Service Stations under Retailer Managed and Vendor Managed Inventories , 2010 .

[30]  Billy E. Gillett,et al.  A Heuristic Algorithm for the Vehicle-Dispatch Problem , 1974, Oper. Res..

[31]  Shu-Chu Liu,et al.  A heuristic method for the inventory routing and pricing problem in a supply chain , 2011, Expert Syst. Appl..

[32]  Gerald G. Brown,et al.  Real-Time Dispatch of Petroleum Tank Trucks , 1981 .

[33]  Kjetil Fagerholt,et al.  A construction and improvement heuristic for a liquefied natural gas inventory routing problem , 2012, Comput. Ind. Eng..

[34]  Feng Chu,et al.  Performance evaluation of distribution strategies for the inventory routing problem , 2010, Eur. J. Oper. Res..

[35]  Feng Chu,et al.  A new model and hybrid approach for large scale inventory routing problems , 2008, Eur. J. Oper. Res..

[36]  Gilbert Laporte,et al.  The inventory-routing problem with transshipment , 2012, Comput. Oper. Res..

[37]  Shu-Chu Liu,et al.  A heuristic method for the vehicle routing problem with backhauls and inventory , 2009, J. Intell. Manuf..

[38]  Ruhul A. Sarker,et al.  Solving the ship inventory routing and scheduling problem with undedicated compartments , 2009, 2009 International Conference on Computers & Industrial Engineering.

[39]  Nenad Bjelic,et al.  Simulation Approach to Analyse Deterministic IRP Solution of the Stochastic Fuel Delivery Problem , 2011 .

[40]  Pierre Hansen,et al.  Variable neighbourhood search: methods and applications , 2010, Ann. Oper. Res..

[41]  Nubia Velasco,et al.  A memetic algorithm for the multi-compartment vehicle routing problem with stochastic demands , 2008, Comput. Oper. Res..