Logistics in Real-Time: Inventory Routing Operations under Stochastic Demand

Abstract

This chapter studies real-time distribution strategies and their associated benefits for a two-level distribution system, from one depot to N retailers, wherein vehicle delivery routes can be updated using real-time information about current inventory levels and the status of the vehicle. In this Chapter three rolling horizon approaches are proposed in which plans are updated using mathematical programming formulation. The proposed re-planning strategies are compared against two benchmark policies using a general discrete-event simulation framework. Proposed re-planning strategies are shown to systematically outperform the two benchmark policies.