Optimizing the inventorying and distribution of chemical fluids: An innovative nested column generation approach.

COCCOLA, MARIANA E.; MENDEZ, CARLOS A.; DONDO, RODOLFO G.

COMPUTERS AND CHEMICAL ENGINEERING

PERGAMON-ELSEVIER SCIENCE LTD

Año: 2018

0098-1354

Vendor-Managed-Inventory is a successful business practices based on the cooperationbetween a supplier and its customers in which demand and inventory information fromthe customers are shared with the supplier. This practice is gaining popularity in thechemical industry and relies on the inventory-routing-problem, which integratesinventory management, vehicle routing, and delivery scheduling decisions. This one is adifficult combinatorial optimization problem both theoretically and practically.However, because of the large expenses involved in distribution and inventorying ofchemical products, it is attractive to make use of optimization tools for exploiting asmany degrees of freedom as possible with the goal of minimizing both distribution andinventorying costs. Consequently, we propose a nested column generation algorithm forsolving an inventorying and distribution problem that models the delivery of severalchemicals fluids. The approach is building on a column generation & incompletebranch-and-price algorithm in which for each delivery route, the delivery patterns offluids are also determined by column generation. We detail the implementation andprovide computational results for realistic test instances.