An Inventory Routing Problem for Perishable Products with Stochastic Demands and Direct Deliveries

In any supply chain, distribution planning of products is of great importance to managers. By effective and flexible distribution planning, mangers can increase the efficiency of time, place, and delivery utility of whole supply chain. In this paper, inventory routing problem (IRP) is applied to distribution planning of perishable products in a supply chain. The studied supply chain is composed of two levels; a supplier and number of customers. Customers are geographically dispersed around the supplier location and their demands are uncertain and follow independent probability distribution functions. The product has pre-determined fixed life and is to be delivered to the customers via a fleet of homogenous vehicles. The supplier uses direct routes for delivering products to customers. The objective is to determine when to deliver to each customer, how much to deliver to them, and how to assign them to vehicle and routes. The mentioned problem is formulated and solved using a stochastic dynamic programming approach. Also, a numerical example is described to illustrate the applicability of the proposed approach.