Operations Research · 2004 · 193 citations · 25 references
ManagementOperations ManagementSupply Chain ManagementInventory ControlInventory ManagementLogistics ManagementInventory OptimizationInventory Replenishment SystemsInventory TheoryReplenishment PlanningSupply Chain OptimizationTransportation ProblemsDelivery SchedulingDistribution PlanningLogisticsStore Replenishment SchedulingTransportation ConstraintsVehicle RoutingVehicle Routing ProblemsWeekly Scheduling
Albert Heijn, BV, a supermarket chain in the Netherlands, faces a vehicle routing and delivery scheduling problem every three to six months. The firm aims to determine a weekly delivery schedule and vehicle routes that minimize cost, using hourly demand forecasts, travel times, distances, cost parameters, and transportation constraints. We developed and implemented a system to solve this problem at Albert Heijn. The system achieved 4 % cost savings in its first year and is projected to yield 12 %–20 % savings, while also providing tactical and strategic benefits such as improved performance measurement, reduced lead time, and increased replenishment frequency.
Albert Heijn, BV, a supermarket chain in the Netherlands, faces a vehicle routing and delivery scheduling problem once every three to six months. Given hourly demand forecasts for each store, travel times and distances, cost parameters, and various transportation constraints, the firm seeks to determine a weekly delivery schedule specifying the times when each store should be replenished from a central distribution center, and to determine the vehicle routes that service these requirements at minimum cost. We describe the development and implementation of a system to solve this problem at Albert Heijn. The system resulted in savings of 4% of distribution costs in its first year of implementation and is expected to yield 12%–20% savings as the firm expands its usage. It also has tactical and strategic advantages for the firm, such as in assessing the cost impact of various logistics and marketing decisions, in performance measurement, and in competing effectively through reduced lead time and increased frequency of replenishment.
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