Multi-product multi-period Inventory Routing Problem with a transshipment option: A green approach

This paper addresses a multi-product multi-period Inventory Routing Problem (IRP) where multiple capacitated vehicles distribute products from multiple suppliers to a single plant to meet the given demand of each product over a finite planning horizon. The demand associated with each product is assumed to be deterministic and time varying. In this supply chain, the products are assumed to be ready for collection at the supplier site when the vehicle arrives. A transshipment option is considered as a possible solution to increase the performance of the supply chain and shows the impact of this solution on the environment. A green logistic issue is also incorporated into the model by considering the interrelationship between the transportation cost and the greenhouse gas emission level. The proposed model is a mixed-integer linear program and solved by CPLEX. We provide a numerical study showing the applicability of the model and underlining the impact of the transshipment option on improved supply chain performance. (C) 2013 Elsevier B.V. All rights reserved.