Optimizing an integrated inventory-routing system for multi-item joint replenishment and coordinated outbound delivery using differential evolution algorithm

A practical and new joint replenishment and delivery (JRD) problem that considers coordinated outbound delivery policy of multiple items (named JRCD) is studied. The proposed JRCD model aims to balance the joint replenishment, inventory holding, and delivery costs by deciding on the replenishment and outbound delivery schedule of each item. The indirect grouping policy is utilized in the JRCD problem, so items dispatched jointly in each outbound delivery are identified on the basis of the replenishment frequency and delivery frequency. Once the matching of items and retailers in each outbound delivery is confirmed, the optimal route can be subsequently obtained by solving the traveling salesman problem. To solve this complex optimization problem, an intelligent algorithm based on differential evolution is utilized because of its superior performance in handling similar complex problems. Basic and extended numerical examples are used to verify the effectiveness of the proposed algorithm. A comparison between the proposed JRCD and JRD with independent delivery is conducted with examples of varying cost parameters. Results provide interesting insights and useful guidelines for managers to create a reasonable policy for effectively controlling their total cost.