Decomposing inventory routing problems with approximate value functions |
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| Authors: | Alejandro Toriello George Nemhauser Martin Savelsbergh |
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| Institution: | 1. Daniel J. Epstein Department of Industrial and Systems Engineering, University of Southern California, Los Angeles, California 90089;2. H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30332;3. CSIRO Mathematics, Informatics and Statistics, North Ryde, New South Wales 1670, Australia |
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| Abstract: | We present a time decomposition for inventory routing problems. The methodology is based on valuing inventory with a concave piecewise linear function and then combining solutions to single‐period subproblems using dynamic programming techniques. Computational experiments show that the resulting value function accurately captures the inventory's value, and solving the multiperiod problem as a sequence of single‐period subproblems drastically decreases computational time without sacrificing solution quality. © 2010 Wiley Periodicals, Inc. Naval Research Logistics, 2010 |
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| Keywords: | inventory routing mixed‐integer program approximate dynamic program |
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