An Integrated Inventory And Distribution Problem For Alternative Fuel: A Matheuristic Approach

Due to the limited driving range of alternative fuel (AF) vehicles and their immature refueling infrastructure, a successful transition to the era of AF vehicles necessitates ensuring stable supply and management of AF in the refueling network. This paper proposes a new mathematical framework to solve an AF inventory and distribution problem in which an AF provider manages and operates the AF refueling network to meet all AF demand in a given time horizon. As a solution method, we present a mixed-integer programming (MIP) model that minimises the sum of AF service, inventory holding, and distribution costs. Furthermore, a matheuristic algorithm hybridising an MIP model and an adaptive large neighbourhood search algorithm is designed to solve practical problems of real transportation networks. The proposed matheuristic algorithm is validated with an application to small-size instances and is applied to six states in the USA with real traffic flows.