An inventory-routing optimization model for pharmaceutical supply chain with time-dependent travel time on a multi-graph network: a case study

Abstract

Purpose

Spurred by the high turnover in the pharmaceutical industry, locating pharmacies inside urban areas along with the high product perishability in this industry, the pharmaceutical supply chain management has recently gained increasing attention. Accordingly, this paper unveils an inventory-routing problem for designing a pharmaceutical supply chain with perishable products and time-dependent travel time in an uncertain environment.

Design/methodology/approach

In this study, mathematical programming is employed to formulate a multi-graph network affected by the traffic volume in order to adapt to real-world situations. Likewise, by transforming the travel speed function to the travel time function using a step-by-step algorithm, the first-in-first-out property is warranted. Moreover, the Box–Jenkins forecasting method is employed to diminish the demand uncertainty.

Findings

An appealing result is that the delivery horizon constraint in the under-study multi-graph network may eventuate in selecting a longer path. Our analysis also indicates that the customers located in the busy places in the city are not predominantly visited in the initial and last delivery horizon, which are the rush times. Moreover, it is concluded that integrating disruption management, routing planning and inventory management in the studied network leads to a reduction of costs in the long term.

Originality/value

Applying the time-dependent travel time with a heterogeneous fleet of vehicles on the multi-graph network, considering perishability in the products for reducing inventory costs, considering multiple trips of transfer fleet, considering disruption impacts on supply chain components and utilizing the Box–Jenkins method to reduce uncertainty are the contributions of the present study.

Citation

Baghdadi, S.M.H., Dehghani, E., Dehghani Sadrabadi, M.H., Heydari, M. and Nili, M. (2024), "An inventory-routing optimization model for pharmaceutical supply chain with time-dependent travel time on a multi-graph network: a case study", Kybernetes, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/K-12-2023-2547