Combining Monte Carlo simulation with heuristics for solving the Inventory Routing Problem with stochastic demands

@article{CceresCruz2012CombiningMC,
  title={Combining Monte Carlo simulation with heuristics for solving the Inventory Routing Problem with stochastic demands},
  author={Jos{\'e} C{\'a}ceres-Cruz and Angel A. Juan and Tolga Bektas and Scott E. Grasman and Javier Faulin},
  journal={Proceedings Title: Proceedings of the 2012 Winter Simulation Conference (WSC)},
  year={2012},
  pages={1-9}
}
In this paper, we introduce a simulation-based algorithm for solving the single-period Inventory Routing Problem (IRP) with stochastic demands. Our approach, which combines simulation with heuristics, considers different potential inventory policies for each customer, computes their associated inventory costs according to the expected demand in the period, and then estimates the marginal routing savings associated with each customer-policy entity. That way, for each customer it is possible to… CONTINUE READING

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