A Data-Driven and Knowledge-Driven Method towards the IRP of Modern Logistics

Abstract

Inventory Routing Problem (IRP) is a typical optimization problem in logistics. To reduce the total cost, which contains the product transportation cost, the inventory holding cost, the customer satisfaction cost, etc., a wide range of impact factors have to be taken into consideration. Since more and more intelligent devices have been adopted in the management of modern logistics, the amount of the collected data (relevant to those impact factors) increases exponentially. However, the quality of the collected data is suffering from a certain number of uncertainties, such as device status and the transmission network environment. Considering the volume and quality of the collected data, the traditional data-driven distribution optimization methods encounter a bottleneck. In this paper, we propose a hybrid optimization method which combines data-driven and knowledge-driven techniques together. In our method, a domain ontology, which has better scalability and generality, is built as an extension of data-driven optimization algorithms. Knowledge reasoning techniques are also combined to handle data quality issue and uncertainties. To evaluate the performance of our method, we carried out a case study, which is provided by a French company “Pierre Fabre Dermo-Cosmetics” (PFDC). This case study is a simplified scenario of the practical business process of PFDC.