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Keywords:

  • inventory routing;
  • mixed-integer program;
  • approximate dynamic program

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