A bi‐objective inventory routing problem with interval grey demand data

Abstract

Purpose

The purpose of this paper is to manage the demand uncertainty considered as lower and upper levels for a medium-scale industrial distribution planning problem in a biobjective inventory routing problem (IRP). In order to achieve this, the grey system theory is applied since no statistical distribution from the past data and incomplete information.

Design/methodology/approach

This study is investigated with optimizing the distribution plan, which involves 30 customers of 12 periods in a manufacturing company under demand uncertainty that is considered as lower and upper levels for a biobjective IRP with using grey demand parameters as a grey integer programming model. In the data set, there are also some missing demand values for the customers. So, the seven different grey models are developed to eliminat the effects on demand uncertainties in computational analysis using a piece of developed software considering the logistical performance indicators such as total deliveries, total cost, the total number of tours, distribution capacity, average remaining capacity and solution time.

Findings

Results show that comparing the grey models, the cost per unit and the maximum number of vehicle parameters are also calculated as the new key performance indicator, and then results were ranked and evaluated in detail. Another important finding is the demand uncertainties can be managed with a new approach via logistics performance indicators using alternative solutions.

Practical implications

The results enable logistics managers to understand the importance of demand uncertainties if more reliable decisions are wanted to make with obtaining a proper distribution plan for effective use of their expectations about the success factors in logistics management.

Originality/value

The study is the first in terms of the application of grey models in a biobjective IRP with using interval grey demand data. Successful implementation of the grey approaches allows obtaining a more reliable distribution plan. In addition, this paper also offers a new key performance indicator for the final decision.

Citation

Kahraman, Ö.U. and Aydemir, E. (2020), "A bi‐objective inventory routing problem with interval grey demand data", Grey Systems: Theory and Application, Vol. 10 No. 2, pp. 193-214. https://doi.org/10.1108/GS-12-2019-0065