Inventory Routing in a City Logistics Context: Review and Collaborative Model

Abstract

The concept of city logistics has been introduced as a result of the issues related to the transportation of goods in the urban area, like traffic congestion, CO2 emissions, noise pollutions, parking difficulties, etc. City logistics has the aim to optimally plan, manage, and control the vehicle movements within a logistical network in an urban area considering integration and coordination among involved stakeholders (Neghabadi et al., 2019). Innovative solutions for city logistics have been introduced over the years. However, while there is a clear trend towards integrated decision making in the supply chain (Speranza, 2018), such integrated decisions have received less attention in a city logistics context. Based on Lagorio et al. (2016), vehicle routing problem (VRP) solutions are the most frequently addressed topics in city logistics by researchers. However, only a few studies consider inventory aspects along with the routing decisions, although integrating these decisions can be highly beneficial (Speranza, 2018). The type of problem that integrates routing and inventory decisions is known as the Inventory Routing Problem (IRP). In VRP, the main decision to take is the set of routes to travel in a single time period. In IRP, three main decisions have to be taken: when and how much to deliver to each customer and the routes to travel at each time period. Therefore, the IRP adds some complexity due to the integration of inventory and routing elements into a multi-period decision process, but may lead to better overall decisions. This study makes two main contributions. First, existing literature on IRP in the context of city logistics is reviewed and interesting research opportunities are identified. Second, first ideas on a new optimization model to address these opportunities are proposed. The literature review shows that while the IRP has been studied extensively, little research exists on IRP in the city logistics context that pays attention to important aspects or characteristics that occur in urban transportation. Examples of such characteristics include access time windows, multiple vehicle trips per day, the use of heterogeneous vehicles, simultaneous pickups and deliveries, time-dependent travel times, and so on. Hence, one promising research direction is the study of IRP that includes more realistic features that appear in urban transportation. In addition, very few studies examine aspects of collaboration in IRP, while collaboration is considered a crucial element in city logistics (Lagorio et al. (2016). Soysal et al. (2018) is the only work that analyzes a collaboration aspect in IRP. However, their model is not specifically designed for city logistics context. Based on these research opportunities, we propose an IRP model that focuses on a city logistics context and assumes a network of multiple suppliers and multiple customers. Besides using the concept of collaboration between suppliers and customers using the VMI system (as in IRP), we aim to also investigate the effects of collaboration among the suppliers. To this end, a multi-depot IRP model with collaboration and one without collaboration are developed to see the impact of collaborative mechanisms in the IRP in a city logistics context.