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- Title
A Case Study of Joint Online Truck Scheduling and Inventory Management for Multiple Warehouses.
- Authors
Helmberg, C.; Röhl, S.
- Abstract
For a real-world problem--transporting pallets between warehouses to guarantee sufficient supply for known and additional stochastic demand--we propose a solution approach via convex relaxation of an integer programming formulation, suitable for online optimization. The essential new element linking routing and inventory management is a convex piecewise-linear cost function that is based on minimizing the expected number of pallets that still need transportation. For speed, the convex relaxation is solved approximately by a bundle approach yielding an online schedule in five to 12 minutes for up to three warehouses and 40,000 articles; in contrast, computation times of state-of-the-art LP solvers are prohibitive for online application. In extensive numerical experiments on a real-world data stream, the approximate solutions exhibit negligible loss in quality; in long-term simulations the proposed method reduces the average number of pallets needing transportation due to short-term demand to less than half the number observed in the data stream.
- Subjects
INTEGER programming; ECONOMIC demand; LOGISTICS; INDUSTRIAL efficiency; INVENTORY control; PRODUCTION scheduling
- Publication
Operations Research, 2007, Vol 55, Issue 4, p733
- ISSN
0030-364X
- Publication type
Article
- DOI
10.1287/opre.1060.0374