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Abstract
The aim of this paper is to present mixed integer linear programming formulations for the production routing problem with backordering (PRP-B) and a new hybrid heuristic to solve the problem. The PRP-B is considered in the context of a supply chain consisting of a production facility with limited production and storage capacities and geographically dispersed points of sale with limited storage capacities. The PRP-B integrates multiple item lot sizing decisions and vehicle routing decisions to the points of sale, where backordering of end customer demands is allowed at a penalty. Two integrated mixed integer programming models are formulated and a solution procedure consisting of a relax-and-fix heuristic combined with a local search algorithm is proposed. The numerical results show that this hybrid heuristic outperforms a state-of-the-art MIP commercial solver, in terms of solution quality and CPU times.
Acknowledgements
The authors would like to express their gratitude to the anonymous reviewer and the associate editor for their very helpful comments. The authors would like also to acknowledge the great IT technical support of Sameera Jawabrah and Emad Al-Janaby.
Notes
No potential conflict of interest was reported by the authors.
Part of this work was done while the first author was a faculty member in the department of Industrial Engineering and Management, University of Sharjah, United Arab Emirates.