A study of Inventory-Routing problem for the distribution system by applying Genetic Algorithm

This study will apply specific operations data of a real logistics firm to analyze Inventory-Routing problems. We first develop a mathematical model for the problem, and then apply a Savings method for the initial feasible solution, and finally implement Genetic Algorithm to obtain the optimal solution. The numerical examples are given to acquire the optimal total inventory routing cost, the optimal delivery routes, the economic order quantities, the optimal service levels, and the reorder points for the retail stores in these proposed routes. The results show that this model can be successfully applied in Inventory-Routing problem in a very efficient way. The performance of this proposed approach is also compared with Savings method and the current routing planning implemented by this specific logistics company. Consequently, the outcome of this study is very promising in many aspects and should be helpful to this logistics company for its future planning of the distribution system.