Artificial Intelligence in Industry 4.0 and 5G Technology

13Inventory Routing Problem with Fuzzy Demand and Deliveries with Priority

Paulina A. Avila‐Torres and Nancy M. Arratia‐Martinez

Universidad de las Américas Puebla, Department of Business Administration, Ex‐Hacienda Santa Catarina Mártir S/N, San Andrés Cholula, C.P., Puebla, 72810, México

13.1 Introduction

Since decades ago, one important challenge is to remain competitive. In order to achieve this, the logistic systems must be significantly improved, and the distribution of goods is the most expensive process. Consequently, making an optimal distribution plan will help to save on transportation costs [1]. Due to this, some authors like Campbell et al. [2] and Moin and Salhi [3] discussed the importance of integration of inventory management and transportation and how these two are interrelated. Yugang et al. [4] mention that the coordination of inventory and transportation decisions in multiple period is the key for the optimization of the inventory routing problem (IRP).

The IRP is an extension of the VRP that involves routing and inventory decisions [5]. In IRP, customers have to be served over a discrete‐time horizon by a fleet of capacitated vehicles starting and ending the routes at a depot [6]. Campbell et al. [2] mention the three decisions made in this kind of problem are: (i) When to serve a customer?, (ii) How much to deliver to a customer when it is served?, and (iii) Which delivery route to use?

IRP may be applied in several industries such as gas companies, petrochemicals, ...