CASH FLOW OPTIMIZATION IN DELIVERY SCHEDULING
Abstract The paper examines the inventory routing problem from the perspective of the present value of the cash flow associated with the distribution of a commodity such as propane. We analyze this problem for both deterministic and stochastic customer demands and validate our results on data from a real life distribution operation of propane. The analysis based on the present value of the cash flow indicates that optimization of propane deliveries based on efficiency/cost criteria alone will generate inferior solutions and it would be more advantageous for the company to set deliveries for a large percentage of the customers based on the present value of cash flow. In addition, in the case of stochastic demands, deliveries based on the cash flow consideration will tend to reduce the number of stockouts (i.e. improve both profit and service).
A vehicle routing improvement algorithm comparison of a "greedy" and a matching implementation for inventory routing
Abstract Given an initial solution to a vehicle routing problem—(VRP)—we present three heuristic route improvement schemes based on the concept of node interchange between different routes. Three algorithms are presented together with their computational performance when applied to an inventory routing problem for 12 consecutive weekly periods. All three procedures improve the initial solution constructed by a modified Clark and Wright algorithm by over 50% as measured by the change in the value of the objective function. In two of the algorithms a minimum weight matching problem is solved repetitively.
Computer Simulation Modeling
Computer simulation as a research methodology is presented as the intersection of modeling, simulation, and computer analysis. Five component parts of simulation models are identified: input variables, output variables, assumptions, algorithms, and parameters. Computer simulation (CSM) has two primary uses for those interested in the study of organizations or who work within them: theory development and policy planning. The advantages and disadvantages of CSM for each of these purposes are examined and recent examples for each are explored.