Authors:
Ehsan Yadollahi
1
;
El-Houssaine Aghezzaf
2
;
Joris Walraevens
3
and
Birger Raa
2
Affiliations:
1
Department of Industrial Systems Engineering and Product Design, Faculty of Engineering and Architecture, Ghent University, Ghent, Belgium, Department of Telecommunications and Information Processing (TELIN), Faculty of Engineering and Architecture, Ghent University, Ghent and Belgium
;
2
Department of Industrial Systems Engineering and Product Design, Faculty of Engineering and Architecture, Ghent University, Ghent and Belgium
;
3
Department of Telecommunications and Information Processing (TELIN), Faculty of Engineering and Architecture, Ghent University, Ghent and Belgium
Keyword(s):
Inventory Routing Problem, Stochastic Demand, Non-stationary, Optimization.
Related
Ontology
Subjects/Areas/Topics:
Industrial Engineering
;
Informatics in Control, Automation and Robotics
;
Intelligent Control Systems and Optimization
;
Optimization Algorithms
;
Performance Evaluation and Optimization
;
Supply Chain and Logistics Engineering
;
Systems Modeling and Simulation
Abstract:
In this paper we solve Stochastic Periodic Inventory Routing Problem (SPIRP) when the accuracy of expected demand is changing among the periods. The variability of demands increases from period to period. This variability follows a certain rate of uncertainty. The uncertainty rate shows the change in accuracy level of demands during the planning horizon. To deal with the growing uncertainty, we apply a safety stock based SPIRP model with different levels of safety stock. To satisfy the service level in the whole planning horizon, the level of safety stock needs to be adjusted according to the demand’s variability. In addition, the behavior of the solution model in long term planning horizons for retailers with different demand accuracy is taken into account. We develop the SPIRP model for one retailer with an average level of demand, and standard deviation for each period. The objective is to find an optimum level of safety stock to be allocated to the retailer, in order to achieve t
he expected level of service, and minimize the costs. We propose a model to deal with the uncertainty in demands, and evaluate the performance of the model based on the defined indicators and experimentally designed cases.
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