A Novel Hybrid Artificial Intelligence Based Methodology for the Inventory Routing Problem

Abstract

In this paper, a new hybrid method including simulation optimization and artificial intelligence based simulation is created to solve the inventory routing problem (IRP) in which three different routing strategies are evaluated for uneven demand patterns including intermittent, erratic, and lumpy demand. The proposed method includes two phases. In the first phase, a nondominated sorting genetic algorithm II based simulation is employed to perform a multi-objective search for the IRP where the objectives of the method are total supply chain cost minimization and average service level maximization. In the second phase, artificial neural network based simulation is used to adjust the reorder point and order-up-to-level by forecasting the customer demand at each replenishment time. The results of the study demonstrated that the average service level is at least 98.54% in the supply chain. From this, it can be concluded that the proposed method can provide a tremendous opportunity to improve the average service level under uncertain environments. In addition, it is determined that different routing strategies can be selected for different demand patterns according to the considered performance measures.