Determination of inventory replenishment policy with the open vehicle routing concept in a multi-depot and multi-retailer distribution system
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Abstract
The Inventory Open Vehicle Routing Problem (IOVRP) involves decisions in inventory replenishment and vehicle routing of a system having multiple depots and multiple retailers. The research objective of this work is to develop practical replenishment decisions by applying meta-heuristics of an Ant Colony Algorithm. The routing solutions applying IOVRP and an Inventory Routing Problem (IRP) that are solved and compared to measure the methods’ performance. The result shows that the IOVRP gives 24.66% better solutions in term of total costs than the IRP. Additionally, sensitivity analysis of related factors, i.e., inventory holding costs, ordering cost and vehicle capacity, was performed on the percentage deviation of total costs. Based on the analysis of variance, there is an advantage of IOVRP over IRP when the problem involves small vehicle capacity, low ordering costs, and high holding costs.
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