Consistent Stochastic Inventory Routing Management (COSIMA)

• Applicant: Professor Dr. Stefan Minner
• Subject Area: Accounting and Finance
• Term: from 2015 to 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 272984253

The project integrates two core logistics decisions in supply chains typically investigated independently or sequentially: inventory management and transportation routing optimization. Although this integration is not new and known as the Inventory Routing Problem in the literature, there is little methodological decision support for real-world problems under uncertainty. We therefore propose to extend the existing knowledge with regard to several important real-world characteristics and develop new approaches for the integration.Stochastic demands at the retailers are typically non-stationary and correlated, emergency shipments are allowed and service level requirements have to be met. Moreover, we incorporate consistency, i.e. delivery at a certain retailer should always take place within the same time interval. This leads to a two-stage multi-echelon inventory problem with routing, stochastic lead times and non-equidistant review periods.Starting from an analysis of both individual domains and including the above real-world problem characteristics, we take the decisions of the respective other domain as given parameters and develop and investigate new anticipatory and iterative schemes for the integration of both domains.For benchmarking purposes, we develop exact solutions using stochastic dynamic programming approaches. For the solution of real-world sized problems, we will develop and in particular integrate heuristic approaches from the inventory and routing domains. Uncertainty will be modeled and represented using scenarios and sampling-based methods. Heuristic solution methods will build on approximate dynamic programming, template-based adaptive large neighborhood search, and branch & regret. The resulting approaches will be validated using artificial problem instances and real-world test cases.

• DFG Programme: Research Grants
• International Connection: Austria
• Partner Organisation: Fonds zur Förderung der wissenschaftlichen Forschung (FWF)
• Co-Investigators: Professor Dr. Karl Dörner; Michael Schilde, Ph.D.