A combined inventory routing and game theory approach to solve a real-life distribution problem. (1st January 2012)

• Record Type: Journal Article
• Authors: Mateo, Manuel; Aghezzaf, El-Houssaine; Vinyes, Pau
• Is Part Of: International journal of business performance and supply chain modelling. Volume 4:Number 1(2012)
• Page Start: 75
• Page End: 89
• Publication Date: 2012-01-01
• Subjects: inventory routing -- game theory -- case study; Business logistics -- Research -- Periodicals; 658.5005
• Languages: English
• ISSNs: 1758-9401

Abstract

In this paper, we discuss a solution approach combining inventory routing and game theory to optimise logistical costs in a real-life distribution system. The problem consists in developing a distribution plan to replenish inventory at each of the involved sales-points, and then clustering them in groups willing to cooperate and share parts of their stocks. The distribution strategy and clustering should be achieved in a way that minimises total distribution and inventory costs of the system. Clearly, cooperation inside each cluster increases the extra potential inventory to which each member of the cluster has access, without having to support the related cost. As a result, the service level that each of these sales-point may achieve would increase. This approach is implemented for a real-life supply chain. A part of obtained results are reported and discussed in the paper.