Inventory Routing For Outbound Distribution: A Case Study Of An Industrial And Technology Company

Abstract

The inventory and distribution planning with multiple products and multiple vehicles is one of the recent common challenges in supply chain. This study focuses on inventory routing problem considering in two main problems: inventory control at the manufacturer and split delivery vehicle routing for outbound distribution planning. A mixed integer model is developed to control inventory, to decide quantity of products made available and routing process whereas minimizing the total cost including production, inventory, and transportation costs. An exact model is coded in CPLEX to estimate the optimal solution. This research considers the case study of steel cord depot of Hyosung – an industrial and technology company. The goal is to provide Hyosung's decision makers with a model and tool to implement production, inventory, vehicle routing optimization models in logistics. The experimental results have shown that proposed model helps improve 5 to 10% of total cost compared to current approach of the company. Keywords: inventory routing, inventory control, split delivery vehicle routing, exact method, CPLEX.