A Strategic Inventory Routing Problem Model in VMI & TPL

This paper addresses inventory routing problem (IRP) in the context of integrating vendor managed inventory and third party logistics. The IRP model discussed in this paper has three main characters: based on strategy, three-tiered supply chain and many-TPL-one network. This paper describes the problem and assumptions in detail and builds a model and computation procedure for the IRP. A heuristic algorithm is designed to solve the problem concerned in the paper. A numerical study is given to explain it at last. Computational results show that the new model and approach yields significant reductions in the size of fleet.