Location, Routing, and Inventory

Literature review

One of the important factors of the total productivity and profitability of a supply chain is to consider its distribution network, which can be used to achieve variety of the supply chain objectives. Designing a distribution network consists of three subproblems, namely, location allocation, vehicle routing, and inventory control. In the literature, there are some research studies amalgamating two of the above subproblems, such as location-routing problems, inventory-routing problems, and location-inventory problems. These three subproblems of a distribution network design are considered in few papers simultaneously. Location-routing problems are surveyed and classified by Min et al. and Nagy and Salhi. Inventory-routing problems are studied in several studies. In addition, a number of studies have considered location-inventory problems. Finally, Ahmadi Javid and Azad presented a new model for a location-routing-inventory problem. They considered one objective for their model and did not consider transportation time and risk-pooling. However, in this paper, we present a multi-objective model to concurrently optimize location, allocation, capacity, inventory, selection of vehicles, and routing decisions with risk-pooling in a stochastic supply chain system for the first time. These decisions are made in a way that the total system cost and the total transportation time are minimized.