Logistics in Real-Time: Inventory Routing Operations under Stochastic Demand

Abstract

This chapter studies real-time distribution strategies and their associated benefits for a two-level distribution system, from one depot to N retailers, wherein vehicle delivery routes can be updated using real-time information about current inventory levels and vehicle status. Three rolling horizon approaches are proposed in which plans are updated using a mathematical programming formulation. The proposed re-planning strategies are compared against two benchmark policies using a general discrete-event simulation framework. Proposed re-planning strategies are shown to systematically outperform the two benchmark policies.