Optimal Shipment Policies for Distribution Systems With a Limited Fleet of Capacitated Vehicles

This paper deals with a distribution system with one origin and one destination in which the shipments are realized with a limited fleet of capacitated vehicles. An optimization problem is defined to find the optimal shipment policies in order to satisfy the external demand, by minimizing holding costs of the customer and transportation costs. Note to Practitioners - A distribution system with one origin and one destination characterized by a Vendor-Managed Inventory policy is considered. In such a system the supplier plans the deliveries to the customer in order to minimize the customer´s inventory and the transportation costs. Besides the definition of some solution methods based on mathematical programming techniques, an algorithmic approach for solving the considered optimization problem is also derived in this paper. Even though this approach is suboptimal, it provides very effective solutions and its major strength stands in the possibility of easily implementing it without the use of mathematical programming solvers.