Inventory Routing Problem in Supply Chain of Perishable Products under Cost Uncertainty

Abstract

This paper presents a multi-objective, multi-period inventory routing problem in the supply chain of perishable products under uncertain costs. In addition to traditional objectives of cost and greenhouse gas (GHG) emission minimization, a novel objective of priority index maximization has been introduced in the model. The priority index quantifies the qualitative social aspects, such as coordination, trust, behavior, and long-term relationships among the stakeholders. In a multi-echelon supply chain, the performance of distributor/retailer is affected by the performance of supplier/distributor. The priority index measures the relative performance index of each player within the supply chain. The maximization of priority index ensures the achievement of social sustainability in the supply chain. Moreover, to model cost uncertainty, a time series integrated regression fuzzy method is developed. This research comprises of three phases. In the first phase, a mixed-integer multi-objective mathematical model while considering the cost uncertainty has been formulated. In order to determine the parameters for priority index objective function, a two-phase fuzzy inference process is used and the rest of the objectives (cost and GHG) have been modeled mathematically. The second phase involves the development of solution methodology. In this phase, to solve the mathematical model, a modified interactive multi-objective fuzzy programming has been employed that incorporates experts’ preferences for objective satisfaction based on their experiences. Finally, in the third phase, a case study of the supply chain of surgical instruments is presented as an example. The results of the case provide optimal flow of products from suppliers to hospitals and the optimal sequence of the visits of different vehicle types that minimize total cost, GHG emissions, and maximizes the priority index.