Multi-objective inventory routing problem: A stochastic model to consider profit, service level and green criteria

• Published in: Transportation research. Part E, Logistics and transportation review Logistics and transportation review, 2017-05, Vol.101, p.59-83
• Main Authors: Rahimi, Mohammad, Baboli, Armand, Rekik, Yacine
• Format: Article
• Language: English
• Subjects: Computer Science; Green supply chain; Inventory Routing Problem; Multi-objective mathematical model; Operations Research; Perishable product; Service level
• ISSN: 1366-5545; 1878-5794
• DOI: 10.1016/j.tre.2017.03.001

•Exploring the non-freshness implication of the IRP and its cost by an extra holding cost.•Introducing the service level measure and environmental footprint as two objective functions.•Deriving the cost penalty if the service levels are exogenously decided without coordination with the logistics components of the IRP.•Modeling some problem parameters as uncertain.•Linkage between the three objective measures permitting to numerically calculate the impact on costs and the green footprint of x% increase in the service level. The Inventory Routing Problem has been mainly studied in recent decades under an economic performance perspective. In this paper, we develop a multi-objective mathematical framework for the IRP to link: (i) the economic performance, (ii) the achieved server level in terms of shortage and delivery delays and (iii) the environmental footprint. The framework developed addresses the uncertainty by considering fuzzy distributions for certain problem inputs, such as the demand and the transportation costs. We show the negative impact on the economic performance when service level targets are exogenously chosen without coordination with the logistics components (inventory and distribution).